SEMI ANNUAL
REPORT
SEPTEMBER 30, 1997
TEMPLETON GLOBAL
INFRASTRUCTURE FUND
[FRANKLIN TEMPLETON LOGO]
FRANKLIN TEMPLETON
<PAGE>
[CELEBRATING 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 Global Infrastructure Fund seeks long-term
capital growth by investing primarily in securities of domestic and foreign
companies that are principally engaged in or related to the development,
operation or rehabilitation of the physical and social infrastructures of
various nations throughout the world.
Dear Shareholder:
We are pleased to bring you this semi-annual report of the Templeton Global
Infrastructure Fund, which covers the six months ended September 30, 1997.
During the reporting period, the U.S. and European economies generally continued
to display fundamental strength, while those of many Asian countries weakened.
Within this environment, the Fund's Class I shares provided a six-month
cumulative total return of 20.09%, as shown in the Performance Summary on page
5, outperforming the Morgan Stanley Capital International(R) (MSCI) World Index,
which posted a gain of 18.58% for the same period.(1)
Propelled by the U.S. economy's relatively moderate growth and modest inflation,
U.S. stock markets reached record highs. Much of the Fund's strong performance
resulted from its U.S. exposure (20% of total net assets at the end of the
period). For example, our holdings in Bay Networks Inc.(2), a network equipment
provider, doubled in price during the period.
CONTENTS
Shareholder Letter ..... 1
Performance Summary .... 5
Financial Highlights and
Statement of Investments 9
Financial Statements ... 15
Notes to Financial
Statements ............. 18
[FUND CATEGORY PYRAMID CHART]
1. Source: Micropal. Index is unmanaged and includes reinvested dividends.
2. A complete listing of all stocks in the portfolio as of September 30, 1997
begins on page 11.
<PAGE>
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
9/30/97
[PIE CHART]
Europe 39.6%
United States 20.0%
Asia 14.6%
Latin America 13.7%
Australia & New Zealand 4.3%
Canada 4.1%
Short-Term Obligations & Other Net Assets 3.7%
Many European stock markets also performed well, with some registering gains
exceeding those of the U.S. stock market. Share prices of both Alcatel Alsthom
Cie Generale D'Electricite SA and Nokia, AB, A, providers of telecommunication
equipment, appreciated substantially and contributed to the Fund's positive
results. During the period, we initiated a position in the Weir Group Plc., a
manufacturer of industrial pumps based in the United Kingdom which we considered
undervalued.
Asia remained an important area for the Fund, with 14.6% of our assets invested
there at the end of the reporting period. However, economic and currency
concerns troubled many countries in the region, and the Thai, Malaysian,
Philippine, and Indonesian stock markets suffered significant price declines.
Fortunately, our exposure to those particular markets was limited. Our larger
exposure to China, which represented about 7% of total net assets, proved to be
quite beneficial. Excitement about opportunities arising from China's July 1
takeover of Hong Kong fueled a rise in the MSCI China - Non-Domestic Index of
28.23%(3), and the Fund's performance was helped by the stock of Chengdu
Telecommunications Cable Co. Ltd., which more than tripled in value during the
period.
During the reporting period, a sound economic environment, exchange rate
stability, relatively low global interest rates, and continued inflows of money
into capital markets helped Latin American stock markets post outstanding gains.
For example, Brazil's Bovespa Index appreciated 27.98% in U.S.-dollar terms.
Believing it was undervalued and well-positioned to benefit from South American
economic growth, we initiated a position in Cia Vale do Rio Doce (CVRD), a
Brazilian steel manufacturer.
Although 1998 could potentially be another year of moderate economic growth and
modest inflation in the U.S., as well as
3. Source: Micropal. Index is unmanaged and includes reinvested dividends.
2
<PAGE>
continuing economic recovery in Europe, individual stock selection will require
extreme diligence on our part. At the end of the reporting period, we were
identifying opportunities in Asia more readily than in the past few years.
However, one consequence of Asia's economic and currency troubles has been a
weakening in some Latin American securities markets due to investor fears that
problems in Asia could spill over to other emerging markets. This could provide
an opportunity to find new bargains and add to existing positions in Latin
America.
Please remember that investing in foreign securities involves 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 are represented in the Fund's portfolio, and these markets involve
heightened risks related to the same factors, in addition to risks associated
with the relatively small size and lesser liquidity of these markets. Because
the Fund focuses on infrastructure-related industries, its return may be more
volatile than that of a more broadly diversified investment. These risks and
other considerations are discussed in the Fund's prospectus. While short-term
volatility can be disconcerting, declines of as much as 40% to 50% are not
unusual in emerging markets. For example, the Hong Kong market has increased
1,523% in the last 15 years, but has suffered four declines of more than 20%
during that time.(4)
This discussion reflects the strategies we employed for the Fund during the
reporting period, 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
TOP 10 HOLDINGS
9/30/97
COMPANY, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
Philips Electronics NV,
Electrical & Electronics,
Netherlands 2.3%
Newbridge Networks Corp.,
Data Processing &
Reproduction, Canada 2.3%
British Steel Plc., ADR,
Metals & Mining,
United Kingdom 2.2%
YPF Sociedad Anonima, ADR,
Energy Sources, Argentina 2.2%
Gradall Industries Inc.,
Machinery & Engineering, U.S. 2.1%
BG Plc.,
Utilities Electrical & Gas,
United Kingdom 2.0%
Axa-UAP, SA,
Financial Services, France 2.0%
Oregon Steel Mills Inc.,
Metals & Mining, U.S. 1.9%
Telecom Italia SpA,
Telecommunications, Italy 1.9%
Telebras-Telecomunicacoes
Brasileiras SA,
Telecommunications, Brazil 1.8%
For a complete list of portfolio holdings,
see page 11 of this report.
4. Source: Bloomberg. Based on quarterly percentage price change over the 15
years ended September 30, 1997.
3
<PAGE>
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.
Thank you for your continued support of the Templeton Global Infrastructure
Fund. We appreciate your support, welcome your comments, and look forward to
serving your investment needs in the future.
Sincerely,
/s/ Mark Holowesko
Mark Holowesko, CFA
President
Templeton Global Investment Trust
/s/ Gary R. Clemons
Gary R. Clemons
Portfolio Manager
Templeton Global Infrastructure Fund
4
<PAGE>
PERFORMANCE SUMMARY
CLASS I
Templeton Global Infrastructure Fund - Class I provided a 20.09% 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 Fund's share price increased $2.14, from $11.54 on March 31, 1997, to $13.68
on September 30, 1997. During the reporting period, shareholders received
distributions totaling 16.0 cents ($0.16) per share, including 10.0 cents
($0.10) in dividend income and 6.0 cents ($0.06) in long-term capital gains.
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) 29.68% 42.86% 47.72%
Average Annual Total Return(2) 22.17% 10.43% 9.77%
Value of $10,000 Investment(3) $ 12,217 $ 13,465 $ 13,923
</TABLE>
1. Cumulative total returns represent the change in value of an investment over
the indicated periods and do not include the initial 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.
From March 14, 1994 through April 15, 1995, expense reductions by the Fund's
Business Manager increased the Fund's total returns.
Past performance is not predictive of future results.
6
<PAGE>
CLASS II
Templeton Global Infrastructure Fund - Class II provided a 19.66% 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 Fund's share price increased $2.09, from $11.46 on March 31, 1997, to $13.55
on September 30, 1997. During the reporting period, shareholders received
distributions totaling 14.65 cents ($0.1465) per share, including 8.65 cents
($0.0865) in dividend income, and 6.0 cents ($0.06) in long-term capital gains.
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) 28.68% 48.77%
Average Annual Total Return(2) 26.37% 17.36%
Value of $10,000 Investment(3) $12,637 $14,729
</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 and include the 1.0% initial sales
charge and 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 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.
Past performance is not predictive of future results.
8
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE 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> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the
period)
Net asset value, beginning of period........ $11.54 $10.04 $9.43 $10.01 $10.00
------------------------------------------------------------------------------
Income from investment operations:
Net investment income...................... .08 .17 .04 .07 .009
Net realized and unrealized gains
(losses)................................. 2.22 1.45 1.03 (.61) .001
------------------------------------------------------------------------------
Total from investment operations............ 2.30 1.62 1.07 (.54) .01
------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income....... (.10) (.07) (.05) (.04) --
Distributions from net realized gains...... (.06) (.05) (.41) -- --
------------------------------------------------------------------------------
Total distributions......................... (.16) (.12) (.46) (.04) --
------------------------------------------------------------------------------
Net asset value, end of period.............. $13.68 $11.54 $10.04 $9.43 $10.01
==============================================================================
Total return*............................... 20.09% 16.22% 11.79% (5.41)% .10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........... $ 33,397 $28,011 $21,590 $18,717 $101
Ratios to average net assets:
Expenses................................... 1.88%** 2.08% 2.37% 3.25% 32.02%**
Expenses, including waiver................. 1.88%** 2.08% 2.32% 1.25% 1.25%**
Net investment income...................... 1.18%** 1.59% .40% 1.38% 1.89%**
Portfolio turnover rate..................... 11.14% 23.52% 38.22% 3.21% --
Average commission rate paid***............. $.0071 $.0015 $.0083 -- --
</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 GLOBAL INFRASTRUCTURE 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> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period............................ $11.46 $9.99 $9.73
-----------------------------------------------------
Income from investment operations:
Net investment income (loss)................................... .03 .11 (.02)
Net realized and unrealized gains.............................. 2.21 1.43 .73
-----------------------------------------------------
Total from investment operations................................ 2.24 1.54 .71
-----------------------------------------------------
Less distributions:
Dividends from net investment income........................... (.09) (.02) (.04)
Distributions from net realized gains.......................... (.06) (.05) (.41)
-----------------------------------------------------
Total distributions............................................. (.15) (.07) (.45)
-----------------------------------------------------
Net asset value, end of period.................................. $13.55 $11.46 $9.99
=====================================================
Total return*................................................... 19.66% 15.48% 7.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)............................... $4,498 $2,844 $1,379
Ratios to average net assets:
Expenses....................................................... 2.53%** 2.73% 2.97%**
Net investment income (loss)................................... .41%** .98% (.88)%**
Portfolio turnover rate......................................... 11.14% 23.52% 38.22%
Average commission rate paid***................................. $.0071 $.0015 $.0083
</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 GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS 90.1%
AUTOMOBILES 2.3%
Autoliv Inc..................................................... Sweden 9,800 $ 416,500
Weifu Fuel Injection Co. Ltd.................................... China 800,000 453,863
-----------
870,363
-----------
BUILDING MATERIALS & COMPONENTS 4.1%
Anglian Group Plc............................................... United Kingdom 40,000 151,205
Cementos Diamante SA, ADR, 144A................................. Colombia 6,300 81,443
*Cementos Paz del Ro SA, ADR, 144A.............................. Colombia 13,438 238,525
Parbury Ltd..................................................... Australia 803,000 338,056
Svedala Industri, A............................................. Sweden 28,500 665,071
Unione Cementi Marchino Emiliane (Unicem), di Risp.............. Italy 31,000 96,997
-----------
1,571,297
-----------
BUSINESS & PUBLIC SERVICES 0.9%
Wheelabrator Technologies Inc................................... United States 21,200 339,200
-----------
CHEMICALS 0.2%
European Vinyls Corporation Evc International NV................ Netherlands 2,865 67,669
-----------
CONSTRUCTION & HOUSING 3.6%
City Developments Ltd., fgn..................................... Singapore 52,000 336,581
Dragados y Construcciones SA.................................... Spain 18,900 422,265
European Techniki............................................... Greece 25,500 58,029
Kaufman & Broad Home Corp....................................... United States 13,400 290,613
*Sociedade Construcoes Soares da Costa SA....................... Portugal 14,200 119,951
*U.S. Home Corp................................................. United States 3,400 131,325
-----------
1,358,764
-----------
DATA PROCESSING & REPRODUCTION 5.1%
*3com Corp. .................................................... United States 8,000 410,000
*Bay Networks Inc. ............................................. United States 11,500 444,187
*NCR Corp....................................................... United States 390 13,626
*Newbridge Networks Corp........................................ Canada 14,400 862,200
*ODS Networks Inc............................................... United States 16,250 218,359
-----------
1,948,372
-----------
ELECTRICAL & ELECTRONICS 7.9%
Alcatel Alsthom Cie Generale D'Electricite SA................... France 3,200 425,577
*Antec Corp..................................................... United States 8,750 102,813
Dongfang Electrical Machinery Co. Ltd., H....................... China 1,208,000 456,630
*DSC Communications Corp........................................ United States 8,050 216,847
Gold Peak Industries (Holdings) Ltd. ........................... Hong Kong 352,000 229,723
*Gold Peak Industries (Holdings) Ltd., wts...................... Hong Kong 70,400 7,551
Motorola Inc.................................................... United States 9,200 661,250
Philips Electronics NV.......................................... Netherlands 10,400 880,125
-----------
2,980,516
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS 0.3%
BICC Plc........................................................ United Kingdom 44,300 118,543
-----------
</TABLE>
11
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS (CONT.)
ENERGY SOURCES 3.0%
*Hub Power Co. Ltd., GDR, 144A.................................. Pakistan 9,750 $ 325,406
YPF Sociedad Anonima, ADR....................................... Argentina 22,200 818,625
-----------
1,144,031
-----------
FINANCIAL SERVICES 2.0%
Axa-UAP SA...................................................... France 11,300 758,075
-----------
FOREST PRODUCTS & PAPER 2.3%
Munksjo AB...................................................... Sweden 39,000 447,336
*PT Inti Indorayon Utama, fgn................................... Indonesia 235,000 85,714
Weyerhaeuser Co................................................. United States 6,000 356,250
-----------
889,300
-----------
INDUSTRIAL COMPONENTS 6.6%
BTR Plc......................................................... United Kingdom 144,200 584,610
*Detroit Diesel Corp. .......................................... United States 26,501 639,340
*Granges AB..................................................... Sweden 9,850 179,211
Madeco Manufacturera de Cobre SA, ADR........................... Chile 14,600 357,700
*Shaw Group Inc................................................. United States 9,400 206,213
Weir Group Plc. ................................................ United Kingdom 112,800 527,315
-----------
2,494,389
-----------
MACHINERY & ENGINEERING 4.5%
*Gradall Industries Inc......................................... United States 52,500 780,938
SNC-Lavalin Group Inc., A....................................... Canada 31,800 344,064
VA Technologie AG............................................... Austria 2,680 574,555
-----------
1,699,557
-----------
MERCHANDISING 1.0%
Det Danske Traelastkompagni AS.................................. Denmark 4,300 386,616
-----------
METALS & MINING 6.2%
British Steel Plc., ADR......................................... United Kingdom 28,700 835,887
Kang Won Industrial Co. Ltd..................................... South Korea 11,000 120,219
Oregon Steel Mills Inc.......................................... United States 27,100 735,088
Pohang Iron & Steel Co. Ltd. ................................... South Korea 3,400 271,219
Cia Vale do Rio Doce, Sponsored ADR............................. Brazil 15,200 371,693
-----------
2,334,106
-----------
MULTI-INDUSTRY 5.1%
Alfa SA de CV, A................................................ Mexico 58,500 549,614
Foster Wheeler Corp. ........................................... United States 7,500 329,531
Hicom Holdings BHD.............................................. Malaysia 32,000 37,679
La Cemento Nacional CA, GDR..................................... Ecuador 400 88,800
La Cemento Nacional CA, GDR, 144A............................... Ecuador 1,400 310,800
Metra OY, B..................................................... Finland 20,600 599,783
-----------
1,916,207
-----------
</TABLE>
12
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS (CONT.)
REAL ESTATE 0.8%
*MDX Public Co. Ltd., fgn....................................... Thailand 127,000 $ 12,245
Taylor Woodrow Plc.............................................. United Kingdom 97,300 292,520
-----------
304,765
-----------
TELECOMMUNICATIONS 14.8%
AT&T Corp....................................................... United States 6,250 276,953
BCE Inc......................................................... Canada 11,800 352,525
*Chengdu Telecommunications Cable Co. Ltd., H................... China 490,000 213,718
Cpt-Telefonica del Peru SA, B................................... Peru 115,000 269,338
Koninklijke PTT Nederland....................................... Netherlands 8,600 337,966
Lucent Technologies Inc......................................... United States 5,125 417,047
MCI Communications Corp. ....................................... United States 10,000 293,750
*Millicom International Cellular SA............................. Luxembourg 11,100 579,975
Nokia AB, A..................................................... Finland 6,900 648,353
Pakistan Telecom Corp. PTC...................................... Pakistan 1,890 182,385
PT Indosat TBK, ADR............................................. Indonesia 200 5,250
Tele Danmark AS, B.............................................. Denmark 2,290 120,474
Telebras-Telecomunicacoes Brasileiras SA........................ Brazil 1,065,900 123,076
Telecom Italia SpA.............................................. Italy 33,330 222,689
Telecom Italia SpA, di Risp..................................... Italy 129,450 504,256
Teledanmark AS, ADS............................................. Denmark 11,660 311,176
Telefonica de Espana SA......................................... Spain 20,900 656,669
Telmex-Telefonos de Mexico SA, L, ADR........................... Mexico 2,010 104,018
-----------
5,619,618
-----------
TRANSPORTATION 6.5%
Air New Zealand Ltd., B......................................... New Zealand 134,000 345,106
*Fritz Companies................................................ United States 27,200 401,200
Great Eastern Shipping Co. Ltd., GDR 144A....................... India 46,900 372,855
Guangshen Railway Co. Ltd., ADR................................. China 20,750 356,641
*GZI Transport Ltd., 144A....................................... China 86,000 38,065
*GZI Transport Ltd., wts. 144A.................................. China 17,200 1,978
IMC Holdings Ltd................................................ Hong Kong 140,000 68,299
Osprey Maritime Ltd............................................. Singapore 349,500 358,754
Qantas Airways Ltd., ADR, 144A.................................. Australia 19,300 391,597
*Stena Line AB, B............................................... Sweden 8,400 37,322
Tranz Rail Holdings Ltd., ADR................................... New Zealand 5,133 84,695
-----------
2,456,512
-----------
UTILITIES ELECTRICAL & GAS 12.9%
Australian Gas & Light Co....................................... Australia 70,600 480,676
BG Plc. ........................................................ United Kingdom 175,000 760,256
Central Costanera SA, ADR, 144A................................. Argentina 9,850 328,128
*Centrica Plc................................................... United Kingdom 175,000 262,352
*CEZ AS......................................................... Czech Republic 9,600 307,223
Guangdong Electric Power Development Co Ltd., B, 144A........... China 816,000 579,995
Hong Kong Electric Holdings Ltd. ............................... Hong Kong 8,000 29,775
</TABLE>
13
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS (CONT.)
UTILITIES ELECTRICAL & GAS (CONT.)
Iberdrola SA.................................................... Spain 39,600 $ 486,809
*Kohinoor Energy Ltd. .......................................... Pakistan 710,000 259,588
Korea Electric Power Corp. ..................................... South Korea 10,300 228,514
National Power Plc. ............................................ United Kingdom 38,400 352,524
Powergen Plc.................................................... United Kingdom 1,700 20,978
Shandong Huaneng Power Development Co. Ltd., ADR................ China 49,400 484,738
Texas Utilties Holding Co....................................... United States 8,000 288,000
-----------
4,869,556
-----------
TOTAL COMMON STOCKS AND WARRANTS (COST $27,235,799)............. 34,127,456
-----------
PREFERRED STOCKS 6.2%
Banco Bradesco SA, pfd.......................................... Brazil 38,400,000 404,838
Ballast Nedam NV, ctf., conv., pfd.............................. Netherlands 7,608 388,066
Telebras-Telecomunicacoes Brasileiras SA, pfd., ADR............. Brazil 4,305 554,269
Cia de Inversiones en Telecomunicaciones SA, 7.00%,3/03/98,
conv., pfd.................................................... Argentina 8,300 589,300
Concessioni e Costruzioni Autostrade SpA, B, pfd................ Italy 180,000 402,723
-----------
TOTAL PREFERRED STOCKS (COST $1,452,162)........................ 2,339,196
-----------
PRINCIPAL
AMOUNT**
-----------
SHORT TERM OBLIGATIONS 4.9%
U.S. GOVERNMENT AND GOVERNMENT AGENCIES
Federal Farm Credit Banks, 5.50%, 1/02/98................... United States $ 430,000 430,014
U.S. Treasury Bills, 5.11% to 5.16% with maturities to
11/13/97.................................................. United States 339,000 337,604
+REPURCHASE AGREEMENT
Aubrey G. Lanston & Co., 6.05%, 10/01/97 (Maturity Value
$1,114,187) Collateral: U.S. Treasury Note, 6.375%,
1/15/00................................................... United States 1,114,000 1,114,000
-----------
TOTAL SHORT TERM OBLIGATIONS (COST $1,881,433).................. 1,881,618
-----------
TOTAL INVESTMENTS (COST $30,569,394) 101.2%..................... 38,348,270
OTHER ASSET, LESS LIABILITIES (1.2%)............................ (453,681)
-----------
TOTAL NET ASSETS 100.0%......................................... $37,894,589
===========
</TABLE>
*Non-income producing.
**Securities traded in U.S. dollars.
+At September 30, 1997, all repurchases agreements held by the Fund had been
entered into on that date.
See notes to financial statements.
14
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $30,569,394).............................. $38,348,270
Receivables:
Investment securities sold......................................................... 1,861,108
Fund shares sold................................................................... 94,244
Dividends and interest............................................................. 67,171
Unamortized organization costs...................................................... 23,824
-----------
Total assets.................................................................... 40,394,617
-----------
Liabilities:
Payables:
Funds advanced by custodian........................................................ 1,470
Investment securities purchased.................................................... 2,329,674
Fund shares redeemed............................................................... 21,341
Affiliates......................................................................... 60,394
Accrued expenses.................................................................... 87,149
-----------
Total liabilities............................................................... 2,500,028
-----------
Net assets, at value........................................................... $37,894,589
===========
Net assets consist of:
Undistributed net investment income................................................. $ 205,400
Net unrealized appreciation......................................................... 7,778,876
Accumulated net realized gain....................................................... 1,289,817
Beneficial shares................................................................... 28,620,496
-----------
Net assets, at value............................................................ $37,894,589
===========
CLASS I:
Net asset value per share ($33,396,479 / 2,441,173 shares outstanding).............. $13.68
===========
Maximum offering price per share ($13.68 / 94.25%).................................. $14.51
===========
CLASS II:
Net asset value per share ($4,498,110 / 332,039 shares outstanding)................. $13.55
===========
Maximum offering price per share ($13.55 / 99.00%).................................. $13.69
===========
</TABLE>
See notes to financial statements.
15
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
(net of $46,534 foreign taxes withheld)
Dividends................................................................ $ 485,114
Interest................................................................. 40,967
------------
Total investment income.............................................. $ 526,081
Expenses:
Management fees (Note 3)................................................. 129,448
Administrative fees (Note 3)............................................. 25,887
Distribution fees (Note 3)
Class I................................................................. 54,280
Class II................................................................ 18,372
Transfer agent fees (Note 3)............................................. 38,000
Custodian fees........................................................... 9,525
Reports to shareholders.................................................. 14,850
Registration and filing fees............................................. 23,000
Professional fees (Note 3)............................................... 13,075
Trustees' fees and expenses.............................................. 2,225
Amortization of organization costs....................................... 7,072
Other.................................................................... 73
------------
Total expenses....................................................... 335,807
------------
Net investment income............................................... 190,274
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................................. 1,334,218
Foreign currency transactions........................................... (17,656)
------------
Net realized gain........................................................ 1,316,562
Net unrealized appreciation on investments............................... 4,684,082
------------
Net realized and unrealized gain.......................................... 6,000,644
------------
Net increase in net assets resulting from operations...................... $6,190,918
============
</TABLE>
See notes to financial statements.
16
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE 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> <C>
Increase in net assets:
Operations:
Net investment income.......................................... $ 190,274 $ 415,433
Net realized gain from investments and foreign currency
transactions................................................. 1,316,562 145,720
Net unrealized appreciation on investments..................... 4,684,082 3,342,267
-----------
Net increase in net assets resulting from operations....... 6,190,918 3,903,420
Distributions to shareholders from:
Net investment income
Class I....................................................... (241,246) (154,491)
Class II...................................................... (23,275) (3,904)
Net realized gain
Class I....................................................... (147,283) (111,693)
Class II...................................................... (16,131) (7,835)
Capital share transactions (Note 2)
Class I....................................................... 219,207 3,041,408
Class II...................................................... 1,057,652 1,218,131
-----------
Net increase in net assets................................. 7,039,842 7,885,036
Net assets:
Beginning of period............................................. 30,854,747 22,969,711
-----------
End of period................................................... $ 37,894,589 $ 30,854,747
===========
Undistributed net investment income included in net assets:
Beginning of period............................................. $ 279,647 $ 22,609
===========
End of period................................................... $ 205,400 $ 279,647
===========
</TABLE>
See notes to financial statements.
17
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Global Infrastructure 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 long-term capital growth by investing primarily in securities of domestic
and foreign companies that are principally engaged in or related to the
development, operation or rehabilitation of the physical and social
infrastructures of various nations throughout the world. 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. 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.
c. 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.
d. 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
18
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. FOREIGN CURRENCY TRANSLATION (CONT.):
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
e. ORGANIZATION COSTS:
Organization costs are 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 of beneficial
interest 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.................................................. 314,241 $ 4,023,059 1,086,417 $11,771,822
Shares issued on reinvestment of distributions............... 29,968 368,297 22,841 247,513
Shares redeemed.............................................. (330,327) (4,172,149) (832,421) (8,977,927)
--------------------------------------------------------
Net increase................................................. 13,882 $ 219,207 276,837 $ 3,041,408
========================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997
--------------------------------------------------------
CLASS II SHARES: SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................................................. 88,701 $ 1,116,911 129,229 $ 1,428,745
Shares issued on reinvestment of distributions............... 3,114 38,023 1,067 11,468
Shares redeemed.............................................. (7,871) (97,282) (20,235) (222,082)
--------------------------------------------------------
Net increase................................................. 83,944 $ 1,057,652 110,061 $ 1,218,131
========================================================
</TABLE>
19
<PAGE>
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI), 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.
The Fund pays an investment management fee to TICI of 0.75% per year of the
average daily net assets of the Fund. The Fund pays FT Services its allocated
share of an administrative fee based on the Trust's 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,
unreimbursed costs were $1,304,827. Distributors received net commissions from
sales of Fund shares, and received contingent deferred sales charges for the
period of $1,399 and $2,017, respectively.
During the period ended September 30, 1997, legal fees of $226 were paid to a
law firm in which a 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 $5,893,025 and $3,184,477,
respectively.
5. INCOME TAXES
The cost of securities for 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............. $10,043,674
Unrealized depreciation............. (2,264,798)
-----------
Net unrealized appreciation......... $ 7,778,876
===========
</TABLE>
20
<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 GLOBAL
INFRASTRUCTURE FUND, INC.
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 Global Infrastructure 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.
413 S97 11/97
TL413 S97 [Recycle Logo] Printed on recycled paper
