SEMI ANNUAL
REPORT
SEPTEMBER 30, 1998
TEMPLETON
GROWTH AND
INCOME FUND
[LOGO] FRANKLIN TEMPLETON
PAGE
[FRANKLIN TEMPLETON CELEBRATING OVER 50 YEARS GRAPHIC]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
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 the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF MARK G. HOLOWESKO, CFA]
Mark G. Holowesko, CFA
President
Templeton Global Investment Trust
PAGE
SHAREHOLDER LETTER
Your Fund's Goal: Templeton Growth and Income Fund seeks high total return (a
combination of capital growth and income) by a flexible policy of investing
primarily in the equity and debt securities of U.S. and foreign companies.
Dear Shareholder:
This semiannual report of Templeton Growth and Income Fund covers the six months
ended September 30, 1998. The reporting period was a tumultuous time for world
equity markets, as the Asian economic malaise caused abysmal stock market
performance in many developing countries and contributed to weak equity
performance in developed markets. Latin America was especially hard hit, with
Brazil, Mexico, and Argentina's equity markets each falling more than 40% during
the period.(1) Although some European and U.S. stock market indices reached new
highs during the first half of the reporting period, most fell sharply in August
and finished the period well below their highs. In August, the U.S. equity
market experienced its largest one-month decline since the
1. Source: Bloomberg. Market return is measured in U.S. dollars and includes
reinvested dividends.
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 11 of
this report.
CONTENTS
Shareholder Letter ....................... 1
Performance Summaries
Class I ................................ 5
Class II ............................... 7
Financial Highlights &
Statement of Investments ................. 9
Financial Statements ..................... 17
Notes to Financial Statements ............ 20
[FUND CATEGORY PYRAMID GRAPHIC]
PAGE
GEOGRAPHIC DISTRIBUTION
BASED ON TOTAL NET ASSETS
9/30/98
[PIE CHART]
<TABLE>
<S> <C>
Europe ........................34.1%
United States..................23.4%
Asia...........................16.6%
Latin America.................. 7.2%
Australia...................... 3.5%
Middle East & Africa........... 2.7%
Canada......................... 2.3%
Short-Term Investments
& Other Net Assets...........10.2%
</TABLE>
October 1987 crash.(2) Within this environment, Templeton Growth and Income Fund
- - Class I posted a -15.61% cumulative total return for the six-month period
ended September 30, 1998, as discussed in the Performance Summary on page 5.
During the period under review, we adhered to our long-standing strategy of
buying securities during times of investor pessimism and selling them when we
believe they have reached their full value. In early 1998, we started selling
shares in several European companies, such as British Telecommunications Plc.
and Telecom Italia SpA, di Risp, whose share prices had reached historical
highs. We also decreased our holdings in the U.S. equity market, where we had
difficulty uncovering value. For example, we sold shares of AT&T Corp. and
liquidated our position in International Business Machines Corp. for a profit.
Believing that many U.S. and European stocks were buoyed by unrealistically high
expectations, we redeployed the Fund's assets to shares we considered
undervalued. Many of these companies are located in Hong Kong, Latin America,
and Asian emerging markets.
Consider the difference in average valuations for Hong Kong and Latin American
companies compared with their U.S. and European counterparts at the end of the
reporting period.(3)
<TABLE>
<CAPTION>
REGION/ PRICE-TO-EARNINGS PRICE-TO-BOOK DIVIDEND
COUNTRY RATIO VALUE YIELD
- ----------------------------------------------------------------------
<S> <C> <C> <C>
U.S. 23.83 4.20 1.59
Europe 19.57 2.89 2.36
Hong Kong* 11.06 0.96 5.55
Latin America 8.62 0.82 5.20
</TABLE>
* Hong Kong reverted to the sovereignty of China on July 1, 1997.
2. Source: Bloomberg. Market return is measured in U.S. dollars and includes
reinvested dividends.
3. Source: Morgan Stanley Capital International(R) (9/30/98).
2
PAGE
Although our Asian and Latin American investments hurt the Fund's performance
during the reporting period, we want to stress that our investment discipline
has not changed. While we cannot predict how securities markets will perform
next week, next month or next year, we believe our time-tested process of
identifying securities selling at low prices in relation to our assessment of
their long-term earnings potential or asset value should benefit our
shareholders over the long term.
There are, of course, special risks involved with global investing, related to
market, currency, economic, social, political and other factors. Emerging
markets involve heightened risks relating to these factors, in addition to those
associated with their relatively small size and lesser liquidity. For example,
Russia's system of share registration and custody creates certain risks of loss
that are not normally associated with other markets. In addition, investing in
any emerging market means accepting a certain amount of volatility and, in some
cases, severe market corrections. These risks and other considerations are
discussed in the Fund's prospectus.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of September 30, 1998, the end of the reporting period. However,
market and economic conditions are changing constantly, which can be expected to
affect our strategies and the
TOP 10 INDUSTRIES
9/30/98
<TABLE>
<CAPTION>
% OF TOTAL
INDUSTRY NET ASSETS
- -------------------------------------------------------
<S> <C>
Utilities Electrical & Gas 13.5%
Food & Household Products 6.6%
Banking 5.6%
Insurance 5.6%
Multi-Industry 5.6%
Telecommunications 5.2%
Metals & Mining 4.8%
Merchandising 4.5%
Real Estate 4.5%
Building Materials & Components 3.3%
</TABLE>
3
PAGE
Fund's portfolio composition. Although historical performance is no guarantee of
future results, these insights may help you better understand our investment and
management philosophy.
We appreciate your participation in Templeton Growth and Income Fund, and
welcome your comments or suggestions.
Sincerely,
/s/ Mark G. Holowesko
- ---------------------
Mark G. Holowesko, CFA
President
Templeton Global Investment Trust
/s/ Richard Sean Farrington
- ---------------------------
Richard Sean Farrington, CFA
Portfolio Manager
Templeton Growth and Income Fund
TOP 10 HOLDINGS
9/30/98
<TABLE>
<CAPTION>
COMPANY, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
---------------------------------------------
<S> <C>
Archer-Daniels Midland Co.,
Food & Household Products, U.S. 2.1%
Thames Water Group Plc.,
Utilities Electrical & Gas,
United Kingdom 2.0%
Illinova Corp.,
Utilities Electrical & Gas, U.S. 1.8%
National Grid Group Plc.,
Utilities Electrical & Gas,
United Kingdom 1.8%
Pharmacia & Upjohn,
Health & Personal Care, U.S. 1.7%
Thorn Plc.,
Merchandising, United Kingdom 1.6%
Potomac Electric Power Co.,
Utilities Electrical & Gas, U.S. 1.6%
SCOR SA,
Insurance, France 1.6%
Texas Utilities Holding Co.,
Utilities Electrical & Gas, U.S. 1.6%
Hong Kong Electric Holdings Ltd.,
Utilities Electrical & Gas,
Hong Kong* 1.5%
</TABLE>
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
4
PAGE
PERFORMANCE SUMMARY
CLASS I
Templeton Growth and Income Fund - Class I posted a -15.61% cumulative total
return for the six-month period ended September 30, 1998. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
all distributions, and does not include the initial sales charge. While we
expect market volatility in the short term, we have always maintained a
long-term perspective when managing the Fund, and encourage shareholders to view
their investments in a similar manner. As you can see from the table on page 6,
the Fund's Class I shares provided a 42.17% cumulative total return since
inception on March 14, 1994.
The Fund's share price, as measured by net asset value, decreased $2.48, from
$14.59 on March 31, 1998, to $12.11 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 11.0 cents ($0.1100) in
dividend income and 12.5 cents ($0.1250) 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 9/30/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 3-YEAR (3/14/94)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return (1) -12.22% 27.05% 42.17%
Average Annual Total Return (2) -17.26% 6.18% 6.65%
Value of $10,000 Investment (3) $8,274 $11,973 $13,399
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 5.75% initial
sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the maximum 5.75% initial sales
charge.
All calculations assume reinvestment of distributions at net asset value. Since
markets can go down as well as up, investment return and principal value will
fluctuate with market conditions, currency volatility, and the economic, social
and political climates of countries where the Fund invests. Emerging markets
involve heightened risks related to the same factors, in addition to those
associated with their relatively small size and lesser liquidity. You may have a
gain or loss when you sell your shares.
The Fund's Investment Manager and Fund Administrator have agreed in advance to
waive a portion of their respective fees, and, in the case of the Fund
Administrator, to make certain payments to reduce expenses, which increases
total return to shareholders. If they had not taken this action, total returns
for Class I shares would have been lower. After July 31, 1999, the fee waiver
and expense reimbursements may be discontinued at any time upon notice to the
Fund's Board of Trustees.
Past performance is not predictive of future results.
6
PAGE
CLASS II
Templeton Growth and Income Fund - Class II posted a -15.90% cumulative total
return for the six-month period ended September 30, 1998. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
all distributions, and does not include sales charges.
The Fund's share price, as measured by net asset value, decreased $2.48, from
$14.43 on March 31, 1998, to $11.95 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 9.14 cents ($0.0914) in
dividend income and 12.5 cents ($0.1250) 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 9/30/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 3-YEAR (5/1/95)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return (1) -12.82% 24.39% 35.35%
Average Annual Total Return (2) -14.55% 7.18% 8.95%
Value of $10,000 Investment (3) $8,545 $12,313 $13,403
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the 1.0% initial sales
charge and the 1.0% contingent deferred sales charge applicable to shares
redeemed within 18 months of investment.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include all sales charges.
All calculations assume reinvestment of distributions at net asset value. Since
markets can go down as well as up, investment return and principal value will
fluctuate with market conditions, currency volatility, and the economic, social
and political climates of countries where the Fund invests. Emerging markets
involve heightened risks related to the same factors, in addition to those
associated with their relatively small size and lesser liquidity. You may have a
gain or loss when you sell your shares.
The Fund's Investment Manager and Fund Administrator have agreed in advance to
waive a portion of their respective fees and, in the case of the Fund
Administrator, to make certain payments to reduce expenses, which increases
total return to shareholders. If they had not taken this action, the total
returns for Class II shares would have been lower. After July 31, 1999, the fee
waiver and expense reimbursements may be discontinued at any time upon notice to
the Fund's Board of Trustees.
Past performance is not predictive of future results.
8
PAGE
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS I
----------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 1998 ----------------------------------------------------------
(UNAUDITED) 1998 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..... $14.59 $12.95 $11.39 $10.05 $10.01 $10.00
----------------------------------------------------------------------------------
Income from investment operations:
Net investment income................... .24 .35 .22 .29 .16 .009
Net realized and unrealized gains
(losses).............................. (2.48) 2.17 1.60 1.54 (.02) .001
----------------------------------------------------------------------------------
Total from investment operations......... (2.24) 2.52 1.82 1.83 .14 .01
----------------------------------------------------------------------------------
Less distributions from:
Net investment income................... (.11) (.28) (.22) (.29) (.10) --
Net realized gains...................... (.13) (.60) (.04) (.20) -- --
----------------------------------------------------------------------------------
Total distributions...................... (.24) (.88) (.26) (.49) (.10) --
----------------------------------------------------------------------------------
Net asset value, end of period........... $12.11 $14.59 $12.95 $11.39 $10.05 $10.01
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Total Return*............................ (15.61)% 20.23% 16.19% 18.70% 1.43% .10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........ $34,346 $46,262 $25,020 $11,732 $5,953 $100
Ratios to average net assets:
Expenses................................ 1.25%** 1.25% 1.25% 1.25% 1.25% 1.25%**
Expenses, excluding waiver and payments
by affiliate........................... 1.63%** 1.76% 2.24% 2.71% 6.11% 32.15%**
Net investment income................... 3.20%** 2.91% 2.21% 2.98% 2.51% 1.89%**
Portfolio turnover rate.................. 19.23% 18.62% 20.72% 10.21% 19.33% --
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+For the period March 14, 1994 (commencement of operations) to March 31, 1994.
9
PAGE
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS II
-------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 1998 -------------------------------
(UNAUDITED) 1998 1997 1996+
-------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period....................... $14.43 $12.84 $11.33 $10.19
-------------------------------------------------------
Income from investment operations:
Net investment income..................................... .17 .29 .21 .22
Net realized and unrealized gains (losses)................ (2.43) 2.11 1.52 1.41
-------------------------------------------------------
Total from investment operations........................... (2.26) 2.40 1.73 1.63
-------------------------------------------------------
Less distributions from:
Net investment income..................................... (.09) (.21) (.18) (.29)
Net realized gains........................................ (.13) (.60) (.04) (.20)
-------------------------------------------------------
Total distributions........................................ (.22) (.81) (.22) (.49)
-------------------------------------------------------
Net asset value, end of period............................. $11.95 $14.43 $12.84 $11.33
-------------------------------------------------------
-------------------------------------------------------
Total Return*.............................................. (15.90)% 19.40% 15.35% 16.51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's).......................... $12,246 $13,293 $3,017 $2,205
Ratios to average net assets:
Expenses.................................................. 1.90%** 1.90% 1.90% 1.90%**
Expenses, excluding waiver and payments by affiliate...... 2.28%** 2.41% 2.89% 3.31%**
Net investment income..................................... 2.53%** 2.25% 1.51% 1.59%**
Portfolio turnover rate.................................... 19.23% 18.62% 20.72% 10.21%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
+For the period May 1, 1995 (effective date) to March 31, 1996.
See Notes to Financial Statements.
10
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 84.9%
AEROSPACE & MILITARY TECHNOLOGY 2.3%
Boeing Co. ................................................. United States 11,500 $ 394,594
*General Motors Corp., H.................................... United States 3,761 138,452
Raytheon Co., A............................................. United States 10,515 544,808
-----------
1,077,854
-----------
APPLIANCES & HOUSEHOLD DURABLES .8%
Guangdong Kelon Electrical Hldgs Ltd., H, 144A.............. China 350,000 234,884
Laox Co. Ltd. .............................................. Japan 7,000 42,323
Sindo Ricoh Co. ............................................ South Korea 3,700 85,001
-----------
362,208
-----------
AUTOMOBILES 2.7%
Autoliv Inc. ............................................... Sweden 17,000 522,943
Fiat SpA, di Risp........................................... Italy 105,710 172,660
Ford Motor Co. ............................................. United States 6,000 281,625
Volvo AB, B................................................. Sweden 11,276 276,341
-----------
1,253,569
-----------
BANKING 5.1%
Bank Handlowy W Warszawie SA, GDR, 144A..................... Poland 16,400 167,280
Banque Nationale de Paris BNP............................... France 5,209 278,815
*Korea Long Term Credit Bank................................ South Korea 13,230 15,696
Merita Ltd., A.............................................. Finland 123,100 628,975
National Australia Cap Sec Plc. ............................ Australia 14,850 395,381
National Westminster Bank Plc. ............................. United Kingdom 25,962 347,666
*Shinhan Bank Co. Ltd. ..................................... South Korea 13,125 30,483
Singapore Finance Ltd., fgn. ............................... Singapore 146,000 60,664
Unibanco Uniao de Bancos Brasileiros SA, GDR................ Brazil 7,500 101,250
Unidanmark AS, A............................................ Denmark 4,883 353,451
-----------
2,379,661
-----------
BROADCASTING & PUBLISHING 1.6%
Oriental Press Group Limited................................ Hong Kong 592,000 62,650
South China Morning Post Holdings, Ltd. .................... Hong Kong 110,000 43,299
South China Morning Post Ltd. .............................. Hong Kong 680,000 267,665
Television Broadcasts Ltd. ................................. Hong Kong 153,000 390,966
-----------
764,580
-----------
BUILDING MATERIALS & COMPONENTS 3.3%
Anglian Group Plc. ......................................... United Kingdom 144,100 443,241
Caradon Plc. ............................................... United Kingdom 226,200 480,508
Hepworth Plc. .............................................. United Kingdom 129,400 311,163
Mirgor SA Comercial Industrial Financiera Inmobiliari, ADR,
144A...................................................... Argentina 34,520 34,520
Nichiha Corp. .............................................. Japan 43,700 263,253
-----------
1,532,685
-----------
</TABLE>
11
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
CHEMICALS 1.2%
DSM NV...................................................... Netherlands 3,900 $ 328,957
Kemira OY................................................... Finland 28,500 187,625
Shanghai Petrochemical Co. Ltd., H.......................... China 262,000 26,712
-----------
543,294
-----------
CONSTRUCTION & HOUSING .7%
Hollandsche Beton Groep NV.................................. Netherlands 27,693 339,359
-----------
ELECTRICAL & ELECTRONICS 3.0%
ABB AB, B................................................... Sweden 21,800 196,171
Catic Shenzhen Holdings Ltd. ............................... China 775,000 44,509
Dongfang Electrical Machinery Co. Ltd., H................... China 388,000 19,279
General Electric Co. Plc. .................................. United Kingdom 77,000 563,656
Hitachi Ltd. ............................................... Japan 44,000 193,947
Motorola Inc. .............................................. United States 5,031 214,761
Tadiran Ltd., ADR........................................... Israel 6,300 175,613
-----------
1,407,936
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS .2%
BICC Plc. .................................................. United Kingdom 95,041 96,101
-----------
ENERGY EQUIPMENT & SERVICES .7%
Sun Co. Inc. ............................................... United States 10,800 345,600
-----------
ENERGY SOURCES 2.9%
MOL Magyar Olay - Es Gazipari RT, GDR, 144A................. Hungary 22,456 431,717
*Ranger Oil Ltd. ........................................... Canada 53,100 347,923
Valero Energy Corp., new.................................... United States 5,910 117,461
YPF Sociedad Anonima, ADR................................... Argentina 17,500 455,000
-----------
1,352,101
-----------
FINANCIAL SERVICES 1.2%
Banca Fideuram SpA.......................................... Italy 17,700 75,258
Industrial Credit & Inv. Corp. of India, GDR, 144A.......... India 17,200 143,190
Morgan Stanley Dean Witter & Co. ........................... United States 7,800 335,888
-----------
554,336
-----------
FOOD & HOUSEHOLD PRODUCTS 6.6%
Archer-Daniels Midland Co. ................................. United States 57,285 959,513
IBP Inc. ................................................... United States 20,000 405,000
Illovo Sugar Limited........................................ South Africa 258,900 215,750
Northern Foods Plc. ........................................ United Kingdom 172,870 525,860
Oshawa Group Ltd. .......................................... Canada 30,200 533,279
Showa Sangyo Co. ........................................... Japan 10,000 19,835
Tate & Lyle Plc. ........................................... United Kingdom 70,500 390,575
-----------
3,049,812
-----------
</TABLE>
12
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
FOREST PRODUCTS & PAPER 2.8%
Assidomaen AB............................................... Sweden 9,600 $ 185,028
Boise Cascade Corp. ........................................ United States 8,603 217,763
Enso OY, R.................................................. Finland 30,600 216,484
Georgia Pacific Corp. ...................................... United States 4,800 219,000
Georgia Pacific Timber Group................................ United States 4,800 93,300
Portucel Industrial Empresa Product Celulose, ADR, 144A..... Portugal 18,900 109,624
*Shorewood Packaging Corp. ................................. United States 20,100 271,350
-----------
1,312,549
-----------
HEALTH & PERSONAL CARE 3.0%
China Pharmaceutical Enterprise & Invt. Corp. Ltd........... China 118,000 8,833
China Pharmaceutical Enterprise & Invt. Corp. Ltd.,144A .... China 60,000 4,491
Internatio-Muller NV........................................ Netherlands 18,653 445,285
Medeva Plc. ................................................ United Kingdom 79,000 123,513
Pharmacia & Upjohn.......................................... United States 15,930 799,487
-----------
1,381,609
-----------
INDUSTRIAL COMPONENTS 1.9%
BTR Plc. ................................................... United Kingdom 336,568 609,144
Madeco Manufacturera de Cobre SA, ADR....................... Chile 18,700 128,563
Walbro Corp. ............................................... United States 16,100 129,806
-----------
867,513
-----------
INSURANCE 5.5%
American General Corp. ..................................... United States 4,034 257,672
HIH Winterthur International Holdings Ltd. ................. Australia 259,837 315,471
Reliastar Financial Corp. .................................. United States 10,386 405,054
SCOR SA..................................................... France 12,300 730,784
Torchmark Corp. ............................................ United States 4,418 158,772
*Zurich Allied AG........................................... Switzerland 1,400 694,792
-----------
2,562,545
-----------
LEISURE & TOURISM .4%
Rank Group Plc. ............................................ United Kingdom 50,300 199,169
-----------
MACHINERY & ENGINEERING 2.6%
First Tractor Company Limited............................... China 494,000 127,509
Laird Group Plc. ........................................... United Kingdom 128,500 343,939
Makita Corp. ............................................... Japan 25,000 287,614
VA Technologie AG........................................... Austria 1,600 145,041
Valmet OY................................................... Finland 26,500 309,859
-----------
1,213,962
-----------
MERCHANDISING 3.1%
Best Denki Co. Ltd. ........................................ Japan 26,000 153,952
Koninklijke Bijenkorf Beheer KBB NV......................... Netherlands 1,324 107,462
</TABLE>
13
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
MERCHANDISING (CONT.)
*Lojas Americanas SA........................................ Brazil 1,819,000 $ 8,441
Matsuzakaya Co. Ltd. ....................................... Japan 14,000 59,036
Safeway Plc. ............................................... United Kingdom 22,556 105,988
Tesco Plc. ................................................. United Kingdom 88,992 256,719
Thorn Plc. ................................................. United Kingdom 179,900 765,838
-----------
1,457,436
-----------
METALS & MINING 4.8%
Anglo American Platinum Corp. Ltd. ......................... South Africa 25,100 367,109
Chongqing Iron & Steel Ltd., H.............................. China 502,000 22,999
Industrias Penoles SA....................................... Mexico 90,800 276,232
Ingwe Coal Corp. Ltd. ...................................... South Africa 84,000 352,857
Iscor Ltd. ................................................. South Africa 689,200 154,718
Pechiney SA, A ............................................. France 8,199 283,501
Pohang Iron & Steel Co. Ltd. ............................... South Korea 6,300 248,464
WMC Ltd. ................................................... Australia 168,205 505,767
-----------
2,211,647
-----------
MULTI-INDUSTRY 5.2%
Beijing Datang Power Generation Co. Ltd., H................. Hong Kong 494,000 117,945
Broken Hill Proprietary Co. Ltd. ........................... Australia 55,431 396,574
Cheung Kong Holdings Ltd. .................................. Hong Kong 84,000 389,185
Elementis Plc. ............................................. United Kingdom 135,672 185,603
Hutchison Whampoa Ltd. ..................................... Hong Kong 110,000 579,209
Jardine Strategic Holdings Ltd. ............................ Hong Kong 25,560 28,116
*Saab AB, B................................................. Sweden 24,400 210,224
Swire Pacific Ltd., A....................................... Hong Kong 126,000 396,774
Swire Pacific Ltd., B....................................... Hong Kong 246,500 116,116
-----------
2,419,746
-----------
REAL ESTATE 4.5%
General Growth Properties................................... United States 7,800 277,875
Hang Lung Development Co. Ltd. ............................. Hong Kong 271,000 237,827
Highwood Properties Inc., REIT.............................. United States 9,000 249,750
Hong Kong Land Holdings Ltd. ............................... Hong Kong 69,487 67,402
LTC Properties Inc. ........................................ United States 21,400 373,163
National Health Investors Inc. ............................. United States 12,400 384,400
Summit Properties Inc., REIT................................ United States 13,200 250,800
Western Investment Real Estate Trust, SBI .................. United States 21,100 270,344
-----------
2,111,561
-----------
TELECOMMUNICATIONS 3.9%
AT&T Corp. ................................................. United States 2,200 128,563
Hong Kong Telecommunications Ltd. .......................... Hong Kong 263,642 518,880
Northern Telecom, Ltd. ..................................... Canada 6,480 207,360
PT Indosat TBK, ADR......................................... Indonesia 4,000 21,250
</TABLE>
14
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS (CONT.)
Telefonica de Argentina SA, B, ADR.......................... Argentina 16,296 $ 479,714
Telefonica del Peru SA, B................................... Peru 84,800 104,143
Telefonica del Peru SA, B, ADR.............................. Peru 6,630 81,218
Telefonos de Mexico SA (Telmex), L, ADR..................... Mexico 5,720 253,110
-----------
1,794,238
-----------
TEXTILES & APPAREL .1%
*Yizheng Chemical Fibre Co. Ltd., H......................... China 720,000 54,824
-----------
TRANSPORTATION 1.9%
Great Eastern Shipping Co. Ltd., GDR, 144A.................. India 44,300 114,073
*Precious Shipping Public Co. Ltd., fgn. ................... Thailand 61,100 15,611
Singapore Airlines Ltd., fgn. .............................. Singapore 77,800 427,168
Transport Development Group Plc. ........................... United Kingdom 89,926 346,140
-----------
902,992
-----------
UTILITIES ELECTRICAL & GAS 12.9%
Bses Ltd., GDR, 144A........................................ India 14,600 192,355
CLP Holdings Ltd. .......................................... Hong Kong 101,500 495,154
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 204,000 701,633
Illinova Corp. ............................................. United States 29,400 843,413
Korea Electric Power Corp. ................................. South Korea 11,000 152,651
Mosenergo, ADR, 144A........................................ Russia 30,600 20,273
National Grid Group Plc. ................................... United Kingdom 111,520 827,246
Potomac Electric Power Co. ................................. United States 28,000 742,000
Public Service Co. of New Mexico............................ United States 17,000 377,188
Texas Utilties Holding Co. ................................. United States 15,650 728,703
Thames Water Group Plc. .................................... United Kingdom 45,964 918,593
-----------
5,999,209
-----------
TOTAL COMMON STOCKS (COST $43,249,257)...................... 39,548,096
-----------
PREFERRED STOCK 4.4%
Banco Bradesco SA, pfd. .................................... Brazil 40,750,000 240,677
Centrais Eletricas Brasileiras SA (Electrobras), ADR,
pfd. ..................................................... Brazil 23,800 263,061
*Centrais Geradoras Do Sul Do Brasil SA (Gerasul), ADR,
pfd. ..................................................... Brazil 2,380 11,848
*Lojas Americanas SA, pfd. ................................. Brazil 3,017,000 12,982
*Lojas Americanas SA, ADR, pfd. ............................ Brazil 866 3,726
Moebel Walther AG, pfd. .................................... Germany 16,400 637,808
Philippine Long Distance Telephone Co., 7.00%, cvt., pfd.,
series 3.................................................. Philippines 6,440 251,160
Sociedad Quimica y Minera de Chile SA, ADR, pfd. ........... Chile 9,400 273,775
+Telecomunicacoes Brasileiras SA (Telebras), ADR, pfd. ..... Brazil 5,500 379,500
-----------
TOTAL PREFERRED STOCKS (COST $2,739,956).................... 2,074,537
-----------
</TABLE>
15
PAGE
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS .5%
Alfa SA, cvt., 144A, 8.00%, 9/15/00................................... Mexico $ 180,000 $ 167,400
Alfa SA de CV, cvt., 8.00%, 9/15/00................................... Mexico 60,000 55,800
----------
TOTAL BONDS (COST $424,347)........................................... 223,200
----------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT (COST $46,413,560)...... 41,845,833
----------
(a)REPURCHASE AGREEMENT 9.8%
Swiss Bank Corp., 5.50%, 10/01/98 (Maturity Value $4,568,698) (COST
$4,568,000) Collateralized by U.S. Treasury Notes and Bonds......... United 4,568,000 4,568,000
States
----------
TOTAL INVESTMENTS (COST $50,981,560) 99.6%............................ 46,413,833
OTHER ASSETS, LESS LIABILITIES .4%.................................... 178,754
----------
TOTAL NET ASSETS 100.0%............................................... $46,592,587
----------
----------
</TABLE>
*Non-income producing.
**Securities traded in U.S. dollars.
(a)At September 30, 1998, all repurchase agreements held by the Fund had been
entered into on that date.
+Includes securities of twelve new holding companies deemed received in
conjunction with the "split up" of Telecomunicaoes Brasileiras SA (Telebras).
See Notes to Financial Statements.
16
PAGE
TEMPLETON GROWTH AND INCOME FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value (cost $46,413,560)..... $41,845,833
Repurchase agreement, at value and cost.................... 4,568,000
Receivables:
Investment securities sold................................ 6,226
Fund shares sold.......................................... 63,868
Dividends and interest.................................... 281,314
Other assets............................................... 41,951
-----------
Total assets.......................................... 46,807,192
-----------
Liabilities:
Payables:
Investment securities purchased........................... 22,967
Fund shares redeemed...................................... 61,938
To affiliates............................................. 67,470
Funds advanced by custodian................................ 2,123
Accrued expenses........................................... 60,107
-----------
Total liabilities..................................... 214,605
-----------
Net assets, at value........................................ $46,592,587
-----------
-----------
Net assets consist of:
Undistributed net investment income........................ $ 839,586
Net unrealized depreciation................................ (4,567,727)
Accumulated net realized gain.............................. 2,420,674
Beneficial shares.......................................... 47,900,054
-----------
Net assets, at value........................................ $46,592,587
-----------
-----------
CLASS I:
Net asset value per share ($34,346,115 / 2,836,427 shares
outstanding)............................................. $12.11
-----------
-----------
Maximum offering price per share ($12.11 / 94.25%)......... $12.85
-----------
-----------
CLASS II:
Net asset value per share ($12,246,472 / 1,024,747 shares
outstanding)*............................................ $11.95
-----------
-----------
Maximum offering price per share ($11.95 / 99.00%)......... $12.07
-----------
-----------
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See Notes to Financial Statements.
17
PAGE
TEMPLETON GROWTH AND INCOME FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $91,785)
Dividends.................................................. $ 935,398
Interest................................................... 314,479
----------
Total investment income............................... $ 1,249,877
------------
Expenses:
Management fees (Note 3)................................... 211,142
Administrative fees (Note 3)............................... 42,228
Distribution fees (Note 3)
Class I................................................... 74,815
Class II.................................................. 67,975
Transfer agent fees (Note 3)............................... 43,050
Reports to shareholders.................................... 18,500
Registration and filing fees............................... 22,000
Professional fees.......................................... 12,000
Trustees' fees and expenses................................ 4,500
Amortization of organization costs......................... 7,071
Other...................................................... 571
----------
Total expenses........................................ 503,852
Expenses waived/paid by affiliate (Note 3)............ (110,060)
------------
Net expenses....................................... 393,792
------------
Net investment income........................... 856,085
------------
Realized and unrealized gains (losses):
Net realized gain from:
Investments............................................... 2,428,044
Foreign currency transactions............................. 137
----------
Net realized gain..................................... 2,428,181
Net unrealized depreciation on investments............ (12,607,078)
------------
Net realized and unrealized loss............................ (10,178,897)
------------
Net decrease in net assets resulting from operations........ $ (9,322,812)
------------
------------
</TABLE>
See Notes to Financial Statements.
18
PAGE
TEMPLETON GROWTH AND INCOME FUND
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 856,085 $ 1,206,380
Net realized gain from investments and foreign currency
transactions............................................ 2,428,181 2,181,856
Net unrealized appreciation (depreciation) on
investments.............................................. (12,607,078) 4,650,441
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (9,322,812) 8,038,677
Distributions to shareholders from:
Net investment income:
Class I.................................................. (357,436) (693,986)
Class II................................................. (90,680) (150,454)
Net realized gains:
Class I.................................................. (408,374) (1,488,247)
Class II................................................. (124,148) (426,523)
Beneficial share transactions (Note 2):
Class I.................................................. (4,226,412) 17,020,983
Class II................................................. 1,567,872 6,216,979
---------------------------------------
Net increase (decrease) in net assets................... (12,961,990) 28,517,429
Net assets:
Beginning of period........................................ 59,554,577 31,037,148
---------------------------------------
End of period.............................................. $ 46,592,587 $59,554,577
---------------------------------------
---------------------------------------
Undistributed net investment income included in net assets:
End of period.............................................. $ 839,586 $ 431,617
---------------------------------------
---------------------------------------
</TABLE>
See Notes to Financial Statements.
19
PAGE
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Growth and Income Fund (the Fund), is a separate, diversified series
of Templeton Global Investment Trust (the Trust), which is an open-end
investments company registered under the Investment Company Act of 1940. The
Fund seeks high total return (a combination of capital growth and income)
through a flexible policy of investing primarily in the equity and debt
securities of U.S. and foreign companies. The following summarizes the Fund's
significant accounting policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
20
PAGE
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
Common expenses incurred by the Trust are allocated among the funds comprising
the Trust based on the ratio of net assets of each fund to the combined net
assets. Other expenses are charged to each fund on a specific identification
basis.
e. 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 shares. 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, 1998, 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, 1998 MARCH 31, 1998
-----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I SHARES:
Shares sold................................................. 638,137 $ 8,803,728 1,614,763 $22,345,226
Shares issued on reinvestment of distributions.............. 42,039 592,860 137,810 1,822,287
Shares redeemed............................................. (1,014,191) (13,623,000) (514,016) (7,146,530)
-----------------------------------------------------------
Net increase (decrease)..................................... (334,015) $ (4,226,412) 1,238,557 $17,020,983
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
21
PAGE
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31, 1998
-------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II SHARES:
Shares sold................................................. 296,594 $ 3,976,473 545,744 $ 7,550,744
Shares issued on reinvestment of distributions.............. 13,012 181,390 36,472 477,961
Shares redeemed............................................. (206,016) (2,589,991) (129,542) (1,811,107)
-------------------------------------------------------
Net increase................................................ 103,590 $ 1,567,872 452,674 $ 6,217,598
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton Global
Advisors Ltd. (TGAL), Franklin Templeton Services, Inc. (FT Services),
Franklin/Templeton Distributors, Inc. (Distributors) and Franklin/Templeton
Investor Services, Inc. (Investor Services), the Fund's investment manager,
administrative manager, principal underwriter and transfer agent, respectively.
The Fund pays an investment management fee to TGAL of 0.75% per year of the
average daily net assets of the Fund. The Fund pays its allocated share of an
administrative fee to FT Services based on the Trust's aggregate average daily
net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
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>
TGAL and FT Services agreed in advance to reduce fees to the extent necessary to
limit total expenses to an annual rate of 1.25% and 1.90% of the Fund's average
daily net assets of Class I and Class II shares, respectively, through August 1,
1999, as reflected in the Statement of Operations.
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 shares, respectively, for costs
incurred in marketing the Fund's Class I and Class II shares. Under the Class I
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At September 30, 1998 unreimbursed costs were $1,068,134. Distributors
received net commissions from sales of Fund shares and received contingent
deferred sales charges for the period of $23,291 and $7,149, respectively.
Legal fees of $171 were paid to a law firm in which a partner is an officer of
the Fund.
22
PAGE
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES
The cost of securities for federal income tax purposes is the same as that shown
in the Statement of Investments. At September 30, 1998, the net unrealized
depreciation based on the cost of investments for income tax purposes was as
follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 5,095,918
Unrealized depreciation..................................... (9,663,645)
-----------
Net unrealized depreciation................................. $(4,567,727)
===========
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1998 aggregated $12,545,173 and $8,745,989,
respectively.
23
PAGE
This page intentionally left blank.
PAGE
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Fund Information at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending 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
Mutual Discovery 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
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Global
Currency Fund
Franklin Templeton Hard
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
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
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 Bond Fund
Franklin Floating Rate Trust
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
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
plan 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. The Franklin Valuemark Funds are managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates.
09/98
PAGE
TEMPLETON GROWTH AND
INCOME FUND
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404-1585
1-800/DIAL BEN(R)
www.franklin-templeton.com
SHAREHOLDER SERVICES
1-800/632-2301
FUND INFORMATION
1-800/342-5236
This report must be preceded or accompanied by a current prospectus of Templeton
Growth and Income Fund, which contains more complete information, including risk
factors, charges and expenses. Like any investment in securities, the value of
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
Investment Manager, which will not always be profitable or wise. The Fund and
its investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept this risk should not invest in shares of
the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded, and accessed. These calls can be
determined by the presence of a regular beeping tone.
414 S98 11/98 [RECYCLED LOGO] Printed on recycled paper
