<PAGE> 1
TEMPLETON GLOBAL
INFRASTRUCTURE FUND
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.
MARCH 31, 1997
Dear Shareholder:
We are pleased to bring you the third annual report of the Templeton Global
Infrastructure Fund, which covers the fiscal year ended March 31, 1997. During
this period, stock prices in many countries rose substantially. However, many
markets experienced significant declines in July 1996 and March 1997, largely
due to fears of rising U.S. interest rates. The most important exception to this
pattern was Japan, where the Nikkei 225(R) stock index ended the period
substantially lower than it had been on March 31, 1996. Within this environment,
the Fund's Class I shares provided a one-year total return of 16.22%, as
discussed in the Performance Summary on page 5, significantly outperforming the
unmanaged Morgan Stanley Capital International(R) World Index, which posted a
total return of only 9.85%. This strong performance can be attributed in part to
our overweighting of the emerging market sector and our lack of Japanese stocks.
1
<PAGE> 2
TEMPLETON GLOBAL
INFRASTRUCTURE FUND - CLASS I
Total Return Index Comparison
One-year Performance (3/31/96 - 3/31/97)
<TABLE>
<S> <C>
Templeton Global Infrastructure Fund(1) 16.22%
MSCI World Index(2) 9.85%
</TABLE>
1. FUND PERFORMANCE DOES NOT INCLUDE THE INITIAL SALES CHARGE AND REPRESENTS
THE CHANGE IN VALUE OF AN INVESTMENT DURING THE PERIOD SHOWN. TOTAL RETURNS
ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AT NET ASSET VALUE. PAST
PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
2. INDEX IS UNMANAGED AND INCLUDES REINVESTED DIVIDENDS.
As you can see in the chart to the right, Europe was our largest regional
allocation on March 31, 1997 and home to five of our ten top holdings. Several
of them performed well during the period, including Alcatel Alsthom, our largest
position. As a result of its success in restructuring, the stock of this French
telecommunications equipment manufacturer appreciated 29% during this time. Our
new investment in Nokia, a Finland-based manufacturer of wireless
telecommunications equipment, also appreciated strongly. Metra, another large
holding based in Finland, has shown rapid growth in its business selling diesel
power plants in developing countries.
In the U.S., where our holdings represent approximately 18.3% of the Fund's
total net assets, we purchased shares in Gradall Industries, a manufacturer of
excavators and material-handling equipment whose stock appreciated during the
period. However, our high-tech U.S. holdings were subject to the market's
downturns, which hurt the Fund's performance. When prices were low, we added to
our positions in several of these companies, and hope to be rewarded if prices
return to what we consider reasonable levels.
TEMPLETON GLOBAL
INFRASTRUCTURE FUND
(PIE CHART)
Geographic Distribution on 3/31/97
Based on Total Net Assets
<TABLE>
<S> <C>
European Stocks 35.3%
United States Stocks 18.3%
Asian Stocks 16.4%
Latin American Stocks 10.9%
Australian & New Zealand Stocks 5.6%
Canadian Stocks 3.4%
Short-Term Obligations & Other Net Assets 10.1%
</TABLE>
Asia, including Australia and New Zealand, remained an important area of
investment for the
2
<PAGE> 3
Fund. Our shares in Guangdong Electric Power Development Co., which controls
several power plants in China's rapidly growing Guangdong province, rose in
value and contributed to the Fund's performance. We also added shares of India's
long-distance telephone company, Videsh Sanchar Nigam Ltd., to the portfolio.
Latin American stocks, which represented 10.9% of total net assets, also
contributed significantly to the Fund's strong returns. For example, our shares
in Telebras, the Brazilian telecommunications company, nearly doubled in value
during this period, and La Cemento Nacional, the largest producer of cement in
Ecuador, posted a 56% gain.
TEMPLETON GLOBAL
INFRASTRUCTURE FUND
Top 10 Holdings on 3/31/97
Based on Total Net Assets
<TABLE>
<CAPTION>
Company, % of Total
Industry, Country Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Alcatel Alsthom SA
Electrical & Electronics, France 3.2%
- --------------------------------------------------------------------------------
Guangdong Electric Power
Development Co. Ltd., B, 144A
Utilities - Electrical & Gas, China 2.2%
- --------------------------------------------------------------------------------
Gradall Industries Inc.
Machinery & Engineering, United States 2.1%
- --------------------------------------------------------------------------------
Metra OY, B
Multi-Industry, Finland 2.0%
- --------------------------------------------------------------------------------
Telebras-Telecomunicacoes Brasileiras SA,
pfd., ADR
Telecommunications, Brazil 1.9%
- --------------------------------------------------------------------------------
Nokia AB, A
Multi-Industry, Finland 1.9%
- --------------------------------------------------------------------------------
Svedala Industri, A
Building Materials & Components, Sweden 1.8%
- --------------------------------------------------------------------------------
Motorola Inc.
Electrical & Electronics, United States 1.8%
- --------------------------------------------------------------------------------
Shandong Huaneng Power Development Co. Ltd.
Utilities - Electrical & Gas, China 1.7%
- --------------------------------------------------------------------------------
Telefonica de Espana SA
Telecommunications, Spain 1.6%
- --------------------------------------------------------------------------------
</TABLE>
FOR A COMPLETE LIST OF PORTFOLIO HOLDINGS, PLEASE SEE PAGE 12 OF THIS REPORT.
Of course, investing in foreign securities involves special risks, such as
market and currency volatility and adverse economic, social and political
developments in the countries where the Fund is invested. Developing 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 price 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 975% in the last
3
<PAGE> 4
15 years, but has suffered five declines of more than 20% during that time.(1)
This discussion reflects the strategies we employed for the Fund during the
reporting period under review, and includes our opinions as of the close of the
period. Since economic and market conditions are constantly changing, our
strategies, and our evaluations, conclusions and decisions regarding portfolio
holdings, may change as new circumstances arise. Although past performance of a
specific investment or sector cannot guarantee future performance, such
information can be useful in analyzing the securities we purchase or sell for
the Fund.
We are optimistic about the long-term potential of global investing, and will
continue to search for companies we believe to be undervalued that contribute to
the world's growth through infrastructure development. 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
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
1. SOURCE: BLOOMBERG. BASED ON QUARTERLY PERCENTAGE PRICE CHANGE OVER 15 YEARS
ENDED MARCH 31, 1997.
4
<PAGE> 5
PERFORMANCE SUMMARY
CLASS I
Templeton Global Infrastructure Fund Class I shares provided a cumulative total
return of 16.22% for the one-year period ended March 31, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the initial sales charge.
The price of the Fund's shares, as measured by net asset value, increased $1.50,
from $10.04 on March 31, 1996 to $11.54 on March 31, 1997. During the reporting
period, shareholders received distributions totaling 12.0 cents ($0.12) per
share, including 7.0 cents ($0.07) in dividend income and 5.0 cents ($0.05) in
short-term capital gains. Of course, past performance is not predictive of
future results, and distributions will vary depending on income earned by the
Fund and any profits realized from the sale of securities in the portfolio, as
well as the level of the Fund's operating expenses.
The graph on page 6 compares the performance of the Templeton Global
Infrastructure Fund Class I shares with the unmanaged Morgan Stanley Capital
International (MSCI) World Index, which tracks 22 equity markets worldwide; and
the Goldman Sachs Extended Global Market Index (GS-EGMI), which is a combination
of the Financial Times of London - Actuaries World Index and the International
Finance Corporation Investable Composite Index, and tracks equity securities in
markets around the world. Please remember that the Fund's performance differs
from that of an index because an index is not managed according to any
investment strategy, does not contain cash (the Fund generally carries a certain
percentage of cash at any given time), and includes no sales charges or
management expenses. Of course, one cannot invest directly in an index and an
index is not representative of the Fund's portfolio.
5
<PAGE> 6
TEMPLETON GLOBAL
INFRASTRUCTURE FUND - CLASS I
Total Return Index Comparison
$10,000 Investment (3/14/94 - 3/31/97)
<TABLE>
<CAPTION>
TEMPLETON GLOBAL MSCI WORLD GS-EGMI
INFRASTRUCTURE FUND - CLASS I* INDEX WORLD INDEX
<S> <C> <C> <C>
3/14/94 $ 9,425 $10,000 $10,000
3/31/94 $ 9,434 $ 9,760 $ 9,771
4/29/94 $ 9,491 $10,063 $10,056
5/31/94 $ 9,500 $10,091 $10,096
6/30/94 $ 9,406 $10,065 $10,087
7/29/94 $ 9,632 $10,258 $10,291
8/31/94 $ 9,811 $10,568 $10,623
9/30/94 $ 9,746 $10,293 $10,360
10/31/94 $ 9,868 $10,587 $10,644
11/30/94 $ 9,387 $10,130 $10,173
12/30/94 $ 9,284 $10,230 $10,245
1/31/95 $ 8,924 $10,078 $10,058
2/28/95 $ 8,924 $10,227 $10,140
3/31/95 $ 8,924 $10,722 $10,636
4/28/95 $ 9,199 $11,098 $11,023
5/31/95 $ 9,563 $11,195 $11,095
6/30/95 $ 9,724 $11,194 $11,062
7/31/95 $10,379 $11,756 $11,628
8/31/95 $ 9,962 $11,496 $11,367
9/29/95 $10,009 $11,833 $11,669
10/31/95 $ 9,354 $11,649 $11,474
11/30/95 $ 9,297 $12,056 $11,860
12/29/95 $ 9,450 $12,411 $12,211
1/31/96 $ 9,897 $12,637 $12,458
2/29/96 $10,066 $12,716 $12,518
3/29/96 $ 9,976 $12,931 $12,705
4/30/96 $10,572 $13,237 $13,031
5/31/96 $10,816 $13,250 $13,029
6/28/96 $10,646 $13,320 $13,083
7/31/96 $10,257 $12,852 $12,601
8/30/96 $10,636 $13,002 $12,760
9/30/96 $10,736 $13,514 $13,254
10/31/96 $10,616 $13,610 $13,323
11/29/96 $11,296 $14,375 $14,039
12/31/96 $11,423 $14,148 $13,820
1/31/97 $11,996 $14,320 $13,982
2/28/97 $11,755 $14,488 $14,160
3/31/97 $11,594 $14,204 $13,852
</TABLE>
* INCLUDES ALL SALES CHARGES.
1. INCLUDES ALL SALES CHARGES AND REPRESENTS THE CHANGE IN VALUE OF AN
INVESTMENT OVER THE PERIOD SHOWN, ASSUMING REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
2. INDEX IS UNMANAGED AND INCLUDES REINVESTED DIVIDENDS.
TEMPLETON GLOBAL
INFRASTRUCTURE FUND - CLASS I
Periods ended March 31, 1997
<TABLE>
<CAPTION>
Since
Inception
One-Year Three-Year (3/14/94)
<S> <C> <C> <C>
Cumulative
Total Return(1) 16.22% 22.89% 23.01%
Average Annual
Total Return(2) 9.56% 5.02% 4.97%
Value of $10,000
Investment(3) $ 10,956 $ 11,583 $ 11,594
- --------------------------------------------------------------------------------
One-Year 3/31/95 3/31/96 3/31/97
Total Return(4) -5.41% 11.79% 16.22%
- --------------------------------------------------------------------------------
</TABLE>
1. CUMULATIVE TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE INDICATED PERIODS AND DOES NOT INCLUDE THE INITIAL SALES CHARGE.
2. AVERAGE ANNUAL TOTAL RETURN REPRESENTS THE AVERAGE ANNUAL CHANGE IN VALUE OF
AN INVESTMENT OVER THE INDICATED PERIODS AND INCLUDES THE MAXIMUM 5.75% 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.
4. ONE-YEAR TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE ONE-YEAR PERIODS ENDED ON THE SPECIFIED DATES AND DOES NOT INCLUDE THE
INITIAL SALES CHARGE.
ALL CALCULATIONS ASSUME REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AT NET ASSET
VALUE. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET
CONDITIONS, CURRENCIES AND THE ECONOMIC, SOCIAL, AND POLITICAL CLIMATES OF
COUNTRIES WHERE INVESTMENTS ARE MADE. EMERGING MARKETS INVOLVE HEIGHTENED RISKS
RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THE RELATIVELY
SMALL SIZE AND LESSER LIQUIDITY OF THESE MARKETS. YOU MAY HAVE A GAIN OR LOSS
WHEN YOU SELL YOUR SHARES. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
FROM MARCH 14, 1994 THROUGH APRIL 15, 1995, THE FUND'S BUSINESS MANAGER MADE
CERTAIN PAYMENTS TO REDUCE EXPENSES, WHICH INCREASED TOTAL RETURN TO
SHAREHOLDERS. IF THE BUSINESS MANAGER HAD NOT TAKEN THIS ACTION, THE TOTAL
RETURNS FOR CLASS I SHARES WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
Under Section 854(b)(2) of the Internal Revenue Code, the Templeton Global
Infrastructure Fund has designated 22.08% of ordinary income dividends paid
(including short-term capital gain distributions) during the fiscal year, as
income qualifying for the dividends received deduction (DRD).
- --------------------------------------------------------------------------------
6
<PAGE> 7
PERFORMANCE SUMMARY
CLASS II
Templeton Global Infrastructure Fund Class II shares provided a cumulative total
return of 15.48% for the one-year period ended March 31, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include sales charges.
The price of the Fund's shares, as measured by net asset value, increased $1.47,
from $9.99 on March 31, 1996 to $11.46 on March 31, 1997. During the reporting
period, shareholders received distributions totaling 7.12 cents ($0.0712) per
share, including 2.12 cents ($0.0212) in dividend income, and 5.0 cents ($0.05)
in short-term capital gains. Of course, past performance is not predictive of
future results, and distributions will vary depending on income earned by the
Fund and any profits realized from the sale of securities in the portfolio, as
well as the level of the Fund's operating expenses.
The graph on page 8 compares the performance of the Templeton Global
Infrastructure Fund Class II shares with the unmanaged Morgan Stanley Capital
International (MSCI) World Index, which tracks 22 equity markets worldwide; and
the Goldman Sachs Extended Global Market Index (GS-EGMI), which is a combination
of the Financial Times of London - Actuaries World Index and the International
Finance Corporation Investable Composite Index, and tracks equity securities in
markets around the world. Please remember that the Fund's performance differs
from that of an index because an index is not managed according to any
investment strategy, does not contain cash (the Fund generally carries a certain
percentage of cash at any given time), and includes no sales charges or
management expenses. Of course, one cannot invest directly in an index and an
index is not representative of the Fund's portfolio.
7
<PAGE> 8
TEMPLETON GLOBAL
INFRASTRUCTURE FUND - CLASS II
Total Return Index Comparison
$10,000 Investment (5/1/95 - 3/31/97)
<TABLE>
<CAPTION>
TEMPLETON GLOBAL MSCI WORLD GS-EGMI
INFRASTRUCTURE FUND - CLASS II* INDEX WORLD INDEX
<S> <C> <C> <C>
5/1/95 $ 9,898 $10,000 $10,000
5/31/95 $10,290 $10,088 $10,065
6/30/95 $10,454 $10,086 $10,036
7/31/95 $11,149 $10,593 $10,549
8/31/95 $10,699 $10,359 $10,312
9/29/95 $10,740 $10,663 $10,587
10/31/95 $10,035 $10,497 $10,410
11/30/95 $ 9,963 $10,863 $10,760
12/29/95 $10,123 $11,183 $11,078
1/31/96 $10,614 $11,387 $11,302
2/29/96 $10,785 $11,458 $11,357
3/29/96 $10,679 $11,651 $11,526
4/30/96 $11,309 $11,927 $11,822
5/31/96 $11,574 $11,940 $11,820
6/28/96 $11,381 $12,002 $11,869
7/31/96 $10,951 $11,581 $11,432
8/30/96 $11,370 $11,716 $11,576
9/30/96 $11,467 $12,177 $12,024
10/31/96 $11,316 $12,264 $12,087
11/29/96 $12,047 $12,953 $12,736
12/31/96 $12,170 $12,748 $12,537
1/31/97 $12,772 $12,904 $12,685
2/28/97 $12,514 $13,054 $12,846
3/31/97 $12,331 $12,799 $12,567
</TABLE>
* INCLUDES ALL SALES CHARGES.
1. INCLUDES ALL SALES CHARGES AND REPRESENTS THE CHANGE IN VALUE OF AN
INVESTMENT OVER THE PERIOD SHOWN, ASSUMING REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
2. INDEX IS UNMANAGED AND INCLUDES REINVESTED DIVIDENDS.
TEMPLETON GLOBAL
INFRASTRUCTURE FUND - CLASS II
Periods ended March 31, 1997
<TABLE>
<CAPTION>
Since
Inception
One-Year (5/1/95)
<S> <C> <C>
Cumulative Total Return(1) 15.48% 24.33%
Average Annual Total Return(2) 13.34% 11.44%
Value of $10,000 Investment(3) $ 11,334 $ 12,308
</TABLE>
1. CUMULATIVE TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE INDICATED PERIODS AND DOES NOT INCLUDE SALES CHARGES.
2. AVERAGE ANNUAL TOTAL RETURN REPRESENTS THE AVERAGE ANNUAL CHANGE IN VALUE OF
AN INVESTMENT OVER THE INDICATED PERIODS AND INCLUDES THE 1.00% INITIAL SALES
CHARGE AND 1.00% 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 DIVIDENDS AND CAPITAL GAINS AT NET ASSET
VALUE. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET
CONDITIONS, CURRENCIES AND THE ECONOMIC, SOCIAL, AND POLITICAL CLIMATES OF
COUNTRIES WHERE INVESTMENTS ARE MADE. EMERGING MARKETS INVOLVE HEIGHTENED RISKS
RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THE RELATIVELY
SMALL SIZE AND LESSER LIQUIDITY OF THESE MARKETS. YOU MAY HAVE A GAIN OR LOSS
WHEN YOU SELL YOUR SHARES. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
- --------------------------------------------------------------------------------
Under Section 854(b)(2) of the Internal Revenue Code, the Templeton Global
Infrastructure Fund has designated 22.08% of ordinary income dividends paid
(including short-term capital gain distributions) during the fiscal year, as
income qualifying for the dividends received deduction (DRD).
- --------------------------------------------------------------------------------
8
<PAGE> 9
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
[PHOTO OF SIR JOHN TEMPLETON]
THE NEW CAREER OF
SIR JOHN TEMPLETON
BY PROFESSOR
ROBERT HERRMANN
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs have been launched in various
locations, with the support of generous local donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
9
<PAGE> 10
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS I
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
MARCH 14, 1994
YEAR ENDED MARCH 31 (COMMENCEMENT
--------------------------------- OF OPERATIONS) TO
1997 1996 1995 MARCH 31, 1994
------- ------- ------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.04 $ 9.43 $ 10.01 $ 10.00
------ ------ ----- ------
Income from investment operations:
Net investment income .17 .04 .07 .009
Net realized and unrealized gain (loss) 1.45 1.03 (.61) .001
------ ------ ----- ------
Total from investment operations 1.62 1.07 (.54) .01
------ ------ ----- ------
Distributions:
Dividends from net investment income (.07) (.05) (.04) --
Distributions from net realized gains (.05) (.41) -- --
------ ------ ----- ------
Total distributions (.12) (.46) (.04) --
------ ------ ----- ------
Change in net asset value 1.50 .61 (.58) .01
------ ------ ----- ------
Net asset value, end of period $ 11.54 $ 10.04 $ 9.43 $ 10.01
====== ====== ===== ======
TOTAL RETURN* 16.22% 11.79% (5.41)% .10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $28,011 $21,590 $18,717 $ 101
Ratio of expenses to average net assets 2.08% 2.37% 3.25% 32.02%**
Ratio of expenses, net of reimbursement, to average net assets 2.08% 2.32% 1.25% 1.25%**
Ratio of net investment income to average net assets 1.59% .40% 1.38% 1.89%**
Portfolio turnover rate 23.52% 38.22% 3.21% --
Average commission rate paid (per share) $ .0015 $ .0083
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
** ANNUALIZED.
10
<PAGE> 11
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS II
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1, 1995+
YEAR ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period $ 9.99 $ 9.73
------- -------
Income from investment operations:
Net investment income (loss) .11 (.02)
Net realized and unrealized gain 1.43 .73
------- -------
Total from investment operations 1.54 .71
------- -------
Distributions:
Dividends from net investment income (.02) (.04)
Distributions from net realized gains (.05) (.41)
------- -------
Total distributions (.07) (.45)
------- -------
Change in net asset value 1.47 .26
------- -------
Net asset value, end of period $ 11.46 $ 9.99
======= =======
TOTAL RETURN* 15.48% 7.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 2,844 $ 1,379
Ratio of expenses to average net assets 2.73% 2.97%**
Ratio of net investment income (loss) to average net assets .98% (.88)%**
Portfolio turnover rate 23.52% 38.22%
Average commission rate paid (per share) $ .0015 $ .0083
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
+ COMMENCEMENT OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Investment Portfolio, March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS: 83.0%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUTOMOBILES: 1.6%
Weifu Fuel Injection Co. Ltd. Chn. 800,000 $ 500,729
- ---------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS &
COMPONENTS: 5.1%
Anglian Group PLC U.K. 40,000 160,224
* Cementos Paz del Rio SA, ADR, 144A Col. 11,600 150,800
Masco Corp. U.S. 3,000 107,250
Parbury Ltd. Aus. 803,000 503,610
Svedala Industri, A Swe. 28,500 555,935
Unione Cementi Marchino Emiliane (Unicem), di Risp Itl. 31,000 92,614
-----------
1,570,433
- ---------------------------------------------------------------------------------------------------------------------
BUSINESS &
PUBLIC SERVICES: 0.9%
Wheelabrator Technologies Inc. U.S. 21,200 278,250
- ---------------------------------------------------------------------------------------------------------------------
CHEMICALS: 0.3%
European Vinyls Corp. EVC International NV Neth. 2,865 95,324
- ---------------------------------------------------------------------------------------------------------------------
CONSTRUCTION &
HOUSING: 2.5%
Dragados y Construcciones SA Sp. 18,900 299,671
European Techniki Gr. 25,500 80,133
Kaufman & Broad Home Corp. U.S. 13,400 177,550
Sociedade Construcoes Soares da Costa SA Port. 14,200 127,943
* U.S. Home Corp. U.S. 3,400 86,275
-----------
771,572
- ---------------------------------------------------------------------------------------------------------------------
DATA PROCESSING &
REPRODUCTION: 3.6%
* 3com Corp. U.S. 8,000 262,000
* Bay Networks Inc U.S. 11,500 205,563
* NCR Corp. U.S. 390 13,747
* Newbridge Networks Corp. Can. 14,400 412,200
* Optical Data Systems Inc. U.S. 16,250 203,125
-----------
1,096,635
- ---------------------------------------------------------------------------------------------------------------------
ELECTRICAL &
ELECTRONICS: 9.1%
Alcatel Alsthom SA Fr. 8,200 990,222
* Antec Corp. U.S. 8,750 68,906
Dongfang Electrical Machinery Co. Ltd., H Chn. 1,208,000 315,692
* DSC Communications Corp. U.S. 8,050 168,547
Gold Peak Industries (Holdings) Ltd. H.K. 352,000 227,135
Motorola Inc. U.S. 9,200 555,450
Philips Electronics NV Neth. 10,400 485,217
-----------
2,811,169
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 13
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Investment Portfolio, March 31, 1997 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ELECTRONIC COMPONENTS
& INSTRUMENTS: 0.6%
BICC U.K. 44,300 $ 196,395
- ---------------------------------------------------------------------------------------------------------------------
ENERGY SOURCES: 0.7%
* Hub Power Co. Ltd., GDR, 144A Pkr. 9,750 221,812
- ---------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS &
PAPER: 2.6% Munksjo AB Swe. 39,000 346,738
PT Inti Indorayon Utama, fgn. Indo. 235,000 178,623
Weyerhaeuser Co. U.S. 6,000 267,750
-----------
793,111
- ---------------------------------------------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS:
2.8%
BW/IP Inc. U.S. 16,900 255,612
Madeco Manufacturera de Cobre SA, ADR Chil. 14,600 390,550
* Shaw Group Inc. U.S. 9,400 215,025
-----------
861,187
- ---------------------------------------------------------------------------------------------------------------------
MACHINERY & ENGINEERING:
4.6%
* Gradall Industries Inc. U.S. 52,500 649,687
SNC-Lavalin Group Inc., A Can. 31,800 367,564
VA Technologie AG, br., 144A Aust. 2,680 395,043
-----------
1,412,294
- ---------------------------------------------------------------------------------------------------------------------
MERCHANDISING: 1.3%
Det Danske Traelastkompagni AS Den. 4,300 399,395
- ---------------------------------------------------------------------------------------------------------------------
METALS & MINING: 3.8%
Kang Won Industrial Co. Ltd. Kor. 11,000 169,514
Maanshan Iron & Steel Co. Ltd., H Chn. 1,660,000 329,913
Oregon Steel Mills Inc. U.S. 27,100 470,863
Pohang Iron & Steel Co. Ltd. Kor. 3,400 215,392
-----------
1,185,682
- ---------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY: 5.3%
Alfa SA de CV, A Mex. 58,500 328,668
Foster Wheeler Corp. U.S. 7,500 265,312
La Cemento Nacional CA, GDR Ecu. 400 96,400
La Cemento Nacional CA, GDR, 144A Ecu. 1,400 337,400
Metra OY, B Fin. 10,300 605,846
-----------
1,633,626
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Investment Portfolio, March 31, 1997 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REAL ESTATE: 1.9%
* MDX Public Co. Ltd., fgn. Thai. 127,000 $ 35,720
New World Development Co. Ltd. H.K. 44,000 237,356
Taylor Woodrow PLC U.K. 97,300 297,710
-----------
570,786
- ---------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS:
16.0%
AT&T Corp. U.S. 6,250 217,187
BCE Inc. Can. 5,900 271,400
* Chengdu Telecommunications Cable Co. Ltd., H Chn. 1,075,000 135,958
Cpt-Telefonica del Peru SA, B Per. 115,000 255,122
Koninklijke PTT Nederland Neth. 8,600 318,697
Lucent Technologies Inc. U.S. 5,125 270,344
MCI Communications Corp. U.S. 10,000 356,250
* Millicom International Cellular SA Lux. 11,100 459,263
Nokia AB, A Fin. 9,450 572,981
* Pakistan Telecom Corp. PTC Pkr. 1,890 141,750
* Seat SPA, di Risp Itl. 94,000 21,052
* SPT Telecom AS Csk. 2,250 267,765
STET (Sta Finanziaria Telefonica Torino) SPA, di
Risp Itl. 94,000 333,602
Tele Danmark AS, B Den. 2,290 120,411
Telecom Italia Spa Itl. 60,000 150,067
Telecom Italia Spa, di Risp Itl. 61,000 130,141
Teledanmark AS, ADS Den. 11,660 304,618
Telefonica de Espana SA Sp. 20,900 505,210
Telmex-Telefonos de Mexico SA, L, ADR Mex. 2,010 77,385
* Videsh Sanchar Nigam Ltd., GDR, 144A Ind. 2,400 42,360
-----------
4,951,563
- ---------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: 5.5%
Air New Zealand Ltd., B N.Z. 134,000 364,912
* Fritz Cos. U.S. 27,200 263,500
* Guangshen Railway Co. Ltd., ADR Chn. 20,750 453,906
* GZI Transport Ltd. Chn. 86,000 50,499
* GZI Transport Ltd., wts. 144A Chn. 17,200 3,063
IMC Holdings Ltd. H.K. 140,000 65,947
Qantas Airways Ltd., ADR, 144A Aus. 19,300 354,638
Stena Line AB, B free Swe. 8,400 39,347
Tranz Rail Holdings Ltd., ADR N.Z. 5,133 93,036
-----------
1,688,848
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 15
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Investment Portfolio, March 31, 1997 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES-ELECTRICAL &
GAS: 14.8%
Australian Gas & Light Company Aus. 70,600 $ 401,265
British Gas PLC U.K. 175,000 467,799
Central Costanera SA, ADR, 144A Arg. 9,850 350,906
* Centrica PLC U.K. 175,000 182,801
* CEZ Csk. 9,600 349,362
Guangdong Electric Power Development Co
Ltd, B, 144A Chn. 680,000 666,951
Iberdrola SA Sp. 39,600 437,275
* Kohinoor Energy Ltd. Pkr. 710,000 292,291
Korea Electric Power Corp. Kor. 10,300 299,051
National Power PLC U.K. 38,400 307,314
Powergen PLC U.K. 1,700 16,583
Shandong Huaneng Power Chn. 49,400 518,700
Texas Utilties Electric Co. U.S. 8,000 274,000
-----------
4,564,298
-----------
TOTAL COMMON STOCKS
(cost $23,140,549) 25,603,109
- ---------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 6.9%
- ---------------------------------------------------------------------------------------------------------------------
Ballast Nedam NV, ctf., conv., pfd. Neth. 7,608 376,455
Banco Bradesco SA, pfd. Braz. 38,400,000 317,206
Cia de Inversiones en Telecomunicaciones SA,
7.00%, conv. pfd. Arg. 8,300 485,550
Concessioni e Costruzioni Autostrade SPA, B, pfd. Itl. 180,000 373,549
Telebras-Telecomunicacoes Brasileiras SA, pfd., ADR Braz. 5,705 584,049
-----------
TOTAL PREFERRED STOCKS
(cost $1,504,517) 2,136,809
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL IN
LOCAL CURRENCY**
- ---------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS:
10.0% (cost $3,090,260)
- ---------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.92% to 5.23% with
maturities to 6/19/97 U.S. 3,116,000 3,090,202
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.9%
(cost $27,735,326) 30,830,120
OTHER ASSETS,
LESS LIABILITIES: 0.1% 24,627
-----------
TOTAL NET ASSETS: 100.0% $30,854,747
===========
</TABLE>
* NON-INCOME PRODUCING.
** CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 16
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $27,735,326) $30,830,120
Receivables:
Fund shares sold 241,397
Dividends 104,864
Unamortized organization costs 30,896
-----------
Total assets 31,207,277
-----------
Liabilities:
Payables:
Investment securities purchased 91,405
Fund shares redeemed 122,878
Funds advanced by custodian 9,695
Accrued expenses 128,552
-----------
Total liabilities 352,530
-----------
Net assets, at value $30,854,747
===========
Net assets consist of:
Undistributed net investment income $ 279,647
Net unrealized appreciation 3,094,794
Accumulated net realized gain 136,669
Net capital paid in on shares of
beneficial interest 27,343,637
-----------
Net assets, at value $30,854,747
===========
Class I
Net asset value per share
($28,010,583 / 2,427,291 shares
outstanding) $ 11.54
===========
Maximum offering price
($11.54 / 94.25%) $ 12.24
===========
Class II
Net asset value per share
($2,844,164 / 248,095 shares
outstanding) $ 11.46
===========
Maximum offering price
($11.46 / 99.00%) $ 11.58
===========
</TABLE>
STATEMENT OF OPERATIONS
for the year ended March 31, 1997
<TABLE>
<S> <C> <C>
Investment income:
(net of $67,182 foreign
taxes withheld)
Dividends $ 874,960
Interest 113,649
----------
Total income $ 988,609
Expenses:
Management fees (Note 3) 202,081
Administrative fees (Note 3) 40,416
Distribution fees (Note 3)
Class I 86,700
Class II 20,113
Transfer agent fees (Note 3) 68,300
Custodian fees 16,976
Reports to shareholders 39,900
Audit fees 19,350
Legal fees 17,600
Registration and filing fees 38,400
Trustee's fees and expenses 5,500
Amortization of organization
costs 14,103
Other 3,737
----------
Total expenses 573,176
----------
Net investment income 415,433
Realized and unrealized gain
(loss):
Net realized gain (loss) on:
Investments 156,734
Foreign currency
transactions (11,014)
----------
145,720
Net unrealized appreciation on
investments 3,342,267
----------
Net realized and unrealized
gain 3,487,987
----------
Net increase in net assets
resulting from operations $3,903,420
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 415,433 $ 76,573
Net realized gain on investment and foreign currency transactions 145,720 1,004,586
Net unrealized appreciation 3,342,267 1,135,543
----------- -----------
Net increase in net assets resulting from operations 3,903,420 2,216,702
Distributions to shareholders:
From net investment income
Class I (154,491) (98,398)
Class II (3,904) (1,342)
From net realized gain
Class I (111,693) (809,303)
Class II (7,835) (38,252)
Fund share transactions (Note 2)
Class I 3,041,408 1,578,477
Class II 1,218,131 1,405,300
----------- -----------
Net increase in net assets 7,885,036 4,253,184
Net assets:
Beginning of year 22,969,711 18,716,527
----------- -----------
End of year $30,854,747 $22,969,711
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 18
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Global Infrastructure Fund (the Fund) is a separate diversified series
of Templeton Global Investment Trust (the Trust), a Delaware business trust,
which is an open-end management investment company registered under the
Investment Company Act of 1940. The Fund seeks 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. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Trustees.
B. FOREIGN CURRENCY TRANSACTIONS:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign currencies
are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customarily
enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
C. INCOME TAXES:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
D. UNAMORTIZED ORGANIZATION COSTS:
Organization costs are being amortized on a straight line basis over five years.
E. SECURITY TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS, AND EXPENSES:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
18
<PAGE> 19
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
F. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Fund offers two classes of shares: Class I shares and Class II shares.
Shares of each class are identical except for their initial sales load, a
contingent deferred sales charge on Class II shares, distribution fees, and
voting rights on matters affecting a single class. At March 31, 1997, there was
an unlimited number of shares of beneficial interest authorized ($.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS I
----------------------------------------------------
YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,086,417 $11,771,822 953,832 $ 9,604,915
Shares issued on reinvestment of distributions 22,841 247,513 88,903 830,045
Shares redeemed (832,421) (8,977,927) (876,366) (8,856,483)
--------- ----------- -------- -----------
Net increase 276,837 $ 3,041,408 166,369 $ 1,578,477
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS II
---------------------------------------------------
FOR THE PERIOD
MAY 1, 1995
YEAR ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold 129,229 $ 1,428,745 149,668 $ 1,523,870
Shares issued on reinvestment of distributions 1,067 11,468 4,179 38,680
Shares redeemed (20,235) (222,082) (15,813) (157,250)
------- ---------- ------- ----------
Net increase 110,061 $ 1,218,131 138,034 $ 1,405,300
======= ========== ======= ==========
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI), Franklin Templeton Services, Inc. (FTSI),
Franklin Templeton Distributors, Inc. (FTD), and Franklin Templeton Investor
Services, Inc. (FTIS), the Fund's investment manager, administrative manager,
principal underwriter, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TICI equal, on an annual
basis, to 0.75% of the Fund's average daily net assets. The Fund pays FTSI
monthly its allocated share of an administrative fee of 0.15% per annum of the
first $200 million of the Trust's aggregate average daily net assets, 0.135% of
the next $500 million, 0.10% of the next $500 million, and 0.075% per annum of
average net assets in excess of $1.2 billion. For the year ended March 31, 1997,
FTD received net commissions of $27,323 from the sale of the Fund's shares and
FTIS received fees of $68,300.
19
<PAGE> 20
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
Under the distribution plans for Class I and Class II shares, the Fund
reimburses FTD quarterly for FTD's costs and expenses in connection with any
activity that is primarily intended to result in a sale of Fund shares, subject
to a maximum of 0.35% and 1.00% per annum of the average daily net assets of
Class I and Class II shares, respectively. Under the Class I distribution plan,
costs and expenses exceeding the maximum may be reimbursed in subsequent
periods. At March 31, 1997, unreimbursed expenses amounted to $1,311,440. Class
II shares redeemed within 18 months are subject to a contingent deferred sales
charge. Contingent deferred sales charges of $747 were paid to FTD for the year
ended March 31, 1997.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel for
the Fund, which firm received legal fees for the year ended March 31, 1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the year
ended March 31, 1997 aggregated $7,336,361 and $4,818,234, respectively. The
cost of securities for federal income tax purposes is the same as that shown in
the Investment Portfolio. Realized gains and losses are reported on an
identified cost basis.
At March 31, 1997, the aggregate gross unrealized appreciation and depreciation
of portfolio securities, based on cost for federal income tax purposes, was as
follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 5,760,422
Unrealized depreciation (2,665,628)
-----------
Net unrealized appreciation $ 3,094,794
===========
</TABLE>
20
<PAGE> 21
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Independent Auditor's Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Templeton Global Infrastructure Fund
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton Global Infrastructure Fund as of March
31, 1997, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton Global Infrastructure Fund as of March 31, 1997, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
April 25, 1997
21
<PAGE> 22
NOTES
--------
<PAGE> 23
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - Call 1-800/DIAL BEN (1-800/342-5236) today for a free
descriptive brochure and prospectus on any of the funds listed below. The
prospectus contains more complete information, including fees, charges and
expenses, and should be read carefully before investing or sending money.
GLOBAL GROWTH
Franklin Global Health Care Fund
Franklin Templeton Japan Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Global Infrastructure Fund
Templeton Global Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Franklin Templeton German Government Bond Fund
Franklin Templeton Global Currency Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and Income Fund
GLOBAL INCOME
Franklin Global Government Income Fund
Franklin Templeton Hard Currency Fund
Franklin Templeton High Income Currency Fund
Templeton Americas Government Securities Fund
GROWTH
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet Investment Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
FUND ALLOCATOR SERIES:
Franklin Templeton Conservative Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
INCOME
Franklin Adjustable Rate Securities Fund
Franklin Adjustable U.S. Government Securities Fund
Franklin's AGE High Income Fund
Franklin Investment Grade Income Fund
Franklin Short-Intermediate U.S. Government Securities Fund
Franklin U.S. Government Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
FOR NON-U.S. INVESTORS:
Franklin Tax-Advantaged High Yield Securities Fund
Franklin Tax-Advantaged International Bond Fund
Franklin Tax-Advantaged U.S. Government Securities Fund
FOR CORPORATIONS:
Franklin Corporate Qualified Dividend Fund
FRANKLIN FUNDS SEEKING TAX-FREE INCOME
Federal Intermediate-Term Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC FUNDS SEEKING TAX-FREE INCOME
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii**
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan*
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee**
Texas
Virginia
Washington**
VARIABLE ANNUITIES+
Franklin Valuemark(R)
Franklin Templeton Valuemark Income Plus (an immediate annuity)
*TWO OR MORE FUND OPTIONS AVAILABLE: LONG-TERM PORTFOLIO, INTERMEDIATE-TERM
PORTFOLIO, A PORTFOLIO OF INSURED MUNICIPAL SECURITIES, AND/OR A HIGH YIELD
PORTFOLIO (CA) AND A MONEY MARKET PORTFOLIO (CA AND NY).
**THE FUND MAY INVEST UP TO 100% OF ITS ASSETS IN BONDS THAT PAY INTEREST
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
***PORTFOLIO OF INSURED MUNICIPAL SECURITIES.
+FRANKLIN VALUEMARK AND FRANKLIN TEMPLETON VALUEMARK INCOME PLUS ARE ISSUED BY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA OR BY ITS WHOLLY OWNED
SUBSIDIARY, PREFERRED LIFE INSURANCE COMPANY OF NEW YORK, AND DISTRIBUTED BY
NALAC FINANCIAL PLANS, LLC.
FGF 02/97
<PAGE> 24
Templeton Global
Infrastructure Fund
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
Principal Underwriter:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Shareholder Services
1-800-632-2301
Fund Information
1-800-342-5236
This report must be preceded or accompanied by the current prospectus of the
Templeton 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 the risk of such losses should not invest
in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded, and accessed. These calls can be
determined by the presence of a regular beeping tone.
[RECYCLE LOGO]
TL413 A97 5/97
TEMPLETON
GLOBAL
INFRASTRUCTURE
FUND
Annual Report
March 31, 1997
[FRANKLIN TEMPLETON 50 YEARS LOGO]
[TEMPLETON LOGO]
