SEMI ANNUAL REPORT
TEMPLETON GREATER EUROPEAN FUND
SEPTEMBER 30, 1998
[LOGO FRANKLIN TEMPLETON]
PAGE
[SEAL - CELEBRATING OVER 50 YEARS]
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.
[PICTURE OF MARK G. HOLOWESKO]
MARK G. HOLOWESKO, CFA
President
Templeton Global Investment Trust
PAGE
CONTENTS
<TABLE>
<S> <C>
Shareholder Letter ........................................... 1
Performance Summaries
Class I ................................................... 6
Class II .................................................. 8
Advisor Class ............................................. 10
Financial Highlights & Statement of Investments .............. 12
Financial Statements ......................................... 20
Notes to the Financial Statements ............................ 23
</TABLE>
[FUND CATEGORY-PYRAMID GRAPHIC]
SHAREHOLDER LETTER
- --------------------------------------------------------------------------------
Your Fund's Goal: Templeton Greater European Fund seeks to achieve long-term
capital appreciation by investing, under normal market conditions, at least 75%
of its total assets in equity securities of "Greater European companies," as
defined in the Fund's prospectus.
- --------------------------------------------------------------------------------
Dear Shareholder:
This semiannual report of Templeton Greater European Fund covers the six months
ended September 30, 1998. After generally performing well during the first four
months of the reporting period, many European markets dropped sharply in August
and September. By September 30, the Morgan Stanley Capital International(R)
(MSCI) All Country Europe Index was down 10.63% for the reporting period.(1)
This steep decline reflected a swing in investor sentiment from optimism about
prospects for monetary union to concern over the fallout from the collapse of
the Russian economy. Within this environment,
1. Source: MSCI. The MSCI All Country Europe Index tracks the performance of
approximately 744 securities located in 21 countries and is designed to measure
the stock market performance of Europe. Price depreciation is measured in U.S.
dollars and includes reinvested dividends. One cannot invest directly in an
index.
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 15 of
this report.
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
9/30/98
<TABLE>
<S> <C>
United Kingdom 22.9%
Sweden 8.7%
Germany 7.7%
France 7.4%
Netherlands 5.3%
Finland 3.9%
Spain 3.1%
Italy 1.3%
Other Countries 15.2%
Short-Term Investments & Other Net Assets 24.5%
</TABLE>
Templeton Greater European Fund - Class I shares posted a -18.06% six-month
cumulative total return, as discussed in the Performance Summary on page 6.
The shift in investor sentiment described on the previous page was particularly
evident in the banking sector. As many bank managements positioned themselves
for the January 1, 1999 introduction of the euro, share prices of many of the
region's financial institutions were bid up on investor expectations of
continued consolidation. Prospects for further takeovers within the industry
appeared likely because many of the region's banks had low levels of loan loss
reserves, plentiful capital, and decreasing operating costs. But market declines
relating to Russian bond and hedge fund losses led a number of investors to
question the quality of many of the region's bank loans, and the prices of many
banking stocks fell.
Throughout this turbulent time, we remained focused on purchasing securities we
believed to be undervalued, and took advantage of market declines to reduce the
Fund's cash position. Exposure to the Nordic region increased during the
reporting period, as we added to the Fund's holdings in Norway and Sweden, two
of the hardest hit European markets. For example, Saab AB, B, a Swedish
automobile company, and Elkem AS, a Norwegian metal and alloy manufacturer, were
added to the Fund's portfolio. Conversely, the Fund's weightings
2
PAGE
in Italy and Spain fell because lofty stock prices made it difficult for us to
uncover equities we considered bargains in those countries.
In terms of industry exposure, we boosted the Fund's weighting in the energy
sources sector, exploiting share-price weakness created by low oil prices. For
example, we purchased shares of Shell Transport & Trading Co. Plc., which owns
approximately 40% of the Royal Dutch/Shell Group of Companies.
In our opinion, market declines which occurred during the reporting period could
ultimately have the cleansing effect of wiping away excessive price/earnings
ratios in some of the region's markets, particularly for a number of large cap
stocks. From January 1, 1998 to September 30, 1998, the 20% most expensive
stocks in the MSCI All Country Europe Index rose 8%, while the cheapest 20% fell
13%(2). As value investors, our performance was hurt by this divergence.
However, the optimism permeating some European equity markets at the beginning
of the period subsided, as many investors seemed to take a more balanced view of
risk and return. We believe that this shift could focus investor attention back
on underlying valuations and company specific fundamentals.
Europe still holds much of the potential for the type of focus and cost-cutting
that has boosted returns on capital in the U.S. over the past decade. The fiscal
responsibility of countries seeking to join the European Monetary Union (EMU)
may also contribute to improved
2. Source: Morgan Stanley Capital International.
TOP 10 INDUSTRIES
9/30/98
<TABLE>
<CAPTION>
% OF TOTAL
INDUSTRY NET ASSETS
- --------------------------------------------------
<S> <C>
Chemicals 6.9%
Energy Sources 6.9%
Automobiles 6.6%
Banking 6.3%
Electrical & Electronics 5.3%
Utilities Electrical & Gas 5.2%
Machinery & Engineering 4.6%
Industrial Components 4.5%
Metals & Mining 4.3%
Transportation 3.4%
</TABLE>
3
PAGE
TOP 10 HOLDINGS
9/30/98
<TABLE>
<CAPTION>
COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- ----------------------------------------------------------------------------
<S> <C>
Norsk Hydro AS Energy Sources, Norway 2.5%
Electrabel SA Utilities Electrical & Gas, Belgium 2.4%
HSBC Holdings Plc. Banking, Hong Kong* 2.4%
Volkswagen AG Automobiles, Germany 2.3%
Deutsche Bank AG Banking, Germany 2.2%
BASF AG Chemicals, Germany 2.2%
Rhone-Poulenc SA, A Chemicals, France 1.9%
Societe Elf Aquitaine SA Energy Sources, France 1.8%
Autoliv Inc., ADR Automobiles, Sweden 1.8%
Philips Electronics NV Electrical & Electronics, Netherlands 1.6%
</TABLE>
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
economic fundamentals in Europe. Government attempts to meet EMU requirements
have led to falling interest rates, declining unemployment and benign inflation.
These conditions have enabled many European companies to grow by taking
advantage of lower borrowing costs and increased consumption. Although investor
uncertainty and market volatility are risk factors we must always consider when
making investments for the Fund, we shall maintain our long-term perspective and
continue looking for stocks we consider bargains that ultimately could benefit
our shareholders.
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 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.
It is important to remember that investing in foreign markets concentrated in a
single region involves special considerations not associated with more broadly
diversified investments, such as market and currency volatility and adverse
economic, social and political developments in the region and 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. For example, Russia's share registration and custody system
4
PAGE
creates certain risks of loss 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.
We thank you for your participation in Templeton Greater European Fund, and
welcome your comments or suggestions.
Sincerely,
/s/ Mark G. Holowesko
- --------------------------------
Mark G. Holowesko, CFA
/s/ Jeffrey A. Everett
- --------------------------------
Jeffrey A. Everett, CFA
/s/ Richard Sean Farrington
- --------------------------------
Richard Sean Farrington, CFA
The Portfolio Management Team
Templeton Greater European Fund
5
PAGE
PERFORMANCE SUMMARY
CLASS I
Templeton Greater European Fund - Class I posted a -18.06% 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.
The Fund's share price, as measured by net asset value, decreased $2.67, from
$14.26 on March 31, 1998, to $11.59 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 4 cents ($0.04) in
income dividends, 3.5 cents ($0.035) in short-term capital gains, and 4.5 cents
($0.045) 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.
6
PAGE
CLASS I
Periods ended 9/30/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 3-YEAR (5/8/95)
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) -7.89% 34.49% 32.88%
Average Annual Total Return(2) -13.17% 8.23% 6.85%
Value of $10,000 Investment(3) $8,683 $12,679 $12,524
9/30/96 9/30/97 9/30/98
- --------------------------------------------------------------------------
One-Year Total Return(4) 12.16% 30.18% -7.89%
</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.
4. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated and does not include the 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
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.
7
PAGE
CLASS II
Templeton Greater European Fund - Class II posted a -18.39% 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 $2.69, from
$14.16 on March 31, 1998, to $11.47 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 2.95 cents ($0.0295) in
income dividends, 3.5 cents ($0.035) in short-term capital gains, and 4.5 cents
($0.045) 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.
8
PAGE
CLASS II
Periods ended 9/30/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 3-YEAR (5/8/95)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) -8.43% 31.65% 29.81%
Average Annual Total Return(2) -10.25% 9.23% 7.66%
Value of $10,000 Investment(3) $9,065 $13,033 $12,852
9/30/96 9/30/97 9/30/98
- ------------------------------------------------------------------------------
One-Year Total Return(4) 11.11% 29.39% -8.43%
</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.
4. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated and does not include 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, total returns
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.
9
PAGE
ADVISOR CLASS
Templeton Greater European Fund - Advisor Class posted a -17.91% 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.
The Fund's share price, as measured by net asset value, decreased $2.66, from
$14.30 on March 31, 1998, to $11.64 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 4.52 cents ($0.0452) in
income dividends, 3.5 cents ($0.035) in short-term capital gains, and 4.5 cents
($0.045) 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.
10
PAGE
ADVISOR CLASS
Periods ended 9/30/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR* 3-YEAR* (5/8/95)*
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) -7.53% 35.51% 33.89%
Average Annual Total Return(1) -7.53% 10.66% 8.97%
Value of $10,000 Investment(2) $9,247 $13,551 $13,389
9/30/96 9/30/97 9/30/98
- --------------------------------------------------------------------------------
One-Year Total Return(3,*) 12.16% 30.65% -7.53%
</TABLE>
*On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
the Fund's Class I performance, excluding the effect of the Class I sales
charge, but including the effect of Class I expenses, containing Rule 12b-1
fees; and (b) for periods after January 1, 1997, figures reflect actual Advisor
Class performance, including the deduction of all fees and expenses applicable
only to that class. Since January 2, 1997 (commencement of sales), the
cumulative total return of Advisor Class shares was 13.12%.
1. Cumulative total return represents the change in value of an investment over
the periods indicated. Average annual total return represents the average annual
change in value of an investment over the periods indicated.
2. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated.
3. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated.
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
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.
11
PAGE
TEMPLETON GREATER EUROPEAN FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS I
-------------------------------------------------------
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........................ $14.26 $12.35 $10.39 $10.00
-------------------------------------------------------
Income from investment operations:
Net investment income...................................... .11 .23 .14 .08
Net realized and unrealized gains (losses)................. (2.66) 2.99 2.09 .31
-------------------------------------------------------
Total from investment operations............................ (2.55) 3.22 2.23 .39
-------------------------------------------------------
Less distributions from:
Net investment income...................................... (.04) (.23) (.13) --
Net realized gains......................................... (.08) (1.08) (.14) --
-------------------------------------------------------
Total distributions......................................... (.12) (1.31) (.27) --
-------------------------------------------------------
Net asset value, end of period.............................. $11.59 $14.26 $12.35 $10.39
-------------------------------------------------------
-------------------------------------------------------
Total Return*............................................... (18.06)% 28.25% 21.70% 3.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $41,310 $19,455 $9,268 $4,308
Ratios to average net assets:
Expenses................................................... 1.85%** 1.85% 1.85% 1.85%**
Expenses, excluding waiver and payments by affiliate....... 1.85%** 2.41% 2.63% 3.56%**
Net investment income...................................... 2.30%** 2.04% 1.72% 1.39%**
Portfolio turnover rate..................................... 11.86% 27.59% 30.58% 9.86%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+For the period May 8, 1995 (commencement of operations) to March 31, 1996.
12
PAGE
TEMPLETON GREATER EUROPEAN 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........................ $14.16 $12.27 $10.32 $10.00
------------------------------------------------------
Income from investment operations:
Net investment income...................................... .11 .12 .11 .07
Net realized and unrealized gains (losses)................. (2.69) 3.01 2.02 .25
------------------------------------------------------
Total from investment operations............................ (2.58) 3.13 2.13 .32
------------------------------------------------------
Less distributions from:
Net investment income...................................... (.03) (.16) (.04) --
Net realized gains......................................... (.08) (1.08) (.14) --
------------------------------------------------------
Total distributions......................................... (.11) (1.24) (.18) --
------------------------------------------------------
Net asset value, end of period.............................. $11.47 $14.16 $12.27 $10.32
------------------------------------------------------
------------------------------------------------------
Total Return*............................................... (18.39)% 27.55% 20.83% 3.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $12,214 $5,929 $2,424 $1,431
Ratios to average net assets:
Expenses................................................... 2.50%** 2.50% 2.50% 2.50%**
Expenses, excluding waiver and payments by affiliate....... 2.50%** 3.05% 3.29% 4.21%**
Net investment income...................................... 1.66%** 1.31% 1.45% 1.06%**
Portfolio turnover rate..................................... 11.86% 27.59% 30.58% 9.86%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
+For the period May 8, 1995 (commencement of operations) to March 31, 1996.
++Based on average weighted shares outstanding.
13
PAGE
TEMPLETON GREATER EUROPEAN FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 1998 --------------------
(UNAUDITED)++ 1998 1997+
--------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $14.30 $12.36 $11.56
--------------------------------------------
Income from investment operations:
Net investment income...................................... .22 .56 .07
Net realized and unrealized gains (losses)................. (2.75) 2.73 .73
--------------------------------------------
Total from investment operations............................ (2.53) 3.29 .80
--------------------------------------------
Less distributions from:
Net investment income...................................... (.05) (.27) --
Net realized gains......................................... (.08) (1.08) --
--------------------------------------------
Total distributions......................................... (.13) (1.35) --
--------------------------------------------
Net asset value, end of period.............................. $11.64 $14.30 $12.36
--------------------------------------------
--------------------------------------------
Total Return*............................................... (17.91)% 28.88% 6.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $216 $83 $36
Ratios to average net assets:
Expenses................................................... 1.50%** 1.50% 1.50%**
Expenses, excluding waiver and payments by affiliate....... 1.50%** 2.06% 1.90%**
Net investment income...................................... 3.01%** 2.38% 2.56%**
Portfolio turnover rate..................................... 11.86% 27.59% 30.58%
</TABLE>
*Total return is not annualized.
**Annualized.
+For the period January 2, 1997 (effective date) to March 31, 1997.
++Based on average weighted shares outstanding.
See Notes to Financial Statements.
14
PAGE
TEMPLETON GREATER EUROPEAN FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
--------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 71.6%
AEROSPACE & MILITARY TECHNOLOGY .5%
Rolls-Royce Plc. ........................................... United Kingdom 77,000 $ 266,289
-----------
AUTOMOBILES 3.4%
Autoliv Inc., ADR........................................... Sweden 31,000 953,603
Fiat SpA, di Risp........................................... Italy 50,000 81,667
Volkswagen AG............................................... Germany 530 38,529
Volvo AB, B................................................. Sweden 31,142 763,197
-----------
1,836,996
-----------
BANKING 6.3%
Bank Slaski SA W Katowicach................................. Poland 2,160 105,793
Banque Nationale de Paris BNP............................... France 4,000 214,102
Deutsche Bank AG............................................ Germany 22,089 1,172,282
HSBC Holdings Plc. ......................................... Hong Kong 69,800 1,279,164
National Westminster Bank Plc. ............................. United Kingdom 18,600 249,079
Unidanmark AS, A............................................ Denmark 2,225 161,054
Union Bank of Norway, Primary Capital Cert. ................ Norway 10,000 169,551
*Union Bank of Norway, rts. ................................ Norway 7,000 18,914
-----------
3,369,939
-----------
BUILDING MATERIALS & COMPONENTS 2.6%
Anglian Group Plc. ......................................... United Kingdom 88,000 270,682
Caradon Plc. ............................................... United Kingdom 216,800 460,540
Hepworth Plc. .............................................. United Kingdom 38,500 92,579
Heywood Williams Group Plc. ................................ United Kingdom 175,700 586,722
-----------
1,410,523
-----------
BUSINESS & PUBLIC SERVICES 1.6%
Kardex AG, br. ............................................. Switzerland 800 184,931
Lex Service Plc. ........................................... United Kingdom 59,700 350,019
SGS Societe Generale de Surveillance Holdings Ltd., br. .... Switzerland 430 310,937
-----------
845,887
-----------
CHEMICALS 6.8%
BASF AG..................................................... Germany 30,000 1,159,542
Cookson Group Plc. ......................................... United Kingdom 72,638 135,169
DSM NV...................................................... Netherlands 5,064 427,138
Imperial Chemical Industries Plc. .......................... United Kingdom 58,600 462,076
Kemira OY................................................... Finland 75,000 493,751
Rhone-Poulenc SA, A......................................... France 24,000 1,006,280
-----------
3,683,956
-----------
CONSTRUCTION & HOUSING .2%
Hollandsche Beton Groep NV.................................. Netherlands 7,233 88,635
-----------
</TABLE>
15
PAGE
TEMPLETON GREATER EUROPEAN FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
--------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
ELECTRICAL & ELECTRONICS 5.3%
ABB AB, A .................................................. Sweden 15,000 $ 135,937
ABB AB, B .................................................. Sweden 66,900 602,010
Alcatel SA.................................................. France 5,000 444,262
General Electric Co. Plc. .................................. United Kingdom 110,000 805,222
Philips Electronics NV...................................... Netherlands 16,000 861,516
-----------
2,848,947
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS .1%
BICC Plc. .................................................. United Kingdom 54,932 55,544
-----------
ENERGY SOURCES 6.9%
Norsk Hydro AS.............................................. Norway 36,900 1,343,513
Rao Gazprom, ADR, Reg S..................................... Russia 12,302 80,270
Repsol SA................................................... Spain 15,200 641,960
Saga Petroleum AS .......................................... Norway 8,175 83,938
Shell Transport & Trading Co. Plc. ......................... United Kingdom 84,000 508,191
Shell Transport & Trading Co. Plc., ADR..................... United Kingdom 1,000 36,438
Societe Elf Aquitaine SA.................................... France 8,020 988,763
-----------
3,683,073
-----------
FINANCIAL SERVICES .6%
Axa-UAP..................................................... France 3,600 329,503
-----------
FOOD & HOUSEHOLD PRODUCTS 1.5%
Express Dairies Plc. ....................................... United Kingdom 12,859 30,266
Northern Foods Plc. ........................................ United Kingdom 25,719 78,236
Pick Szeged RT ............................................. Hungary 4,900 140,096
Tate & Lyle Plc. ........................................... United Kingdom 97,000 537,387
-----------
785,985
-----------
FOREST PRODUCTS & PAPER 3.4%
Assidomaen AB............................................... Sweden 4,800 92,514
Enso OY, A.................................................. Finland 47,500 345,380
Enso OY, R.................................................. Finland 12,200 86,311
Mo Och Domsjoe AB, B........................................ Sweden 18,931 361,246
Svenska Cellulosa AB, B..................................... Sweden 4,500 89,029
UPM-Kymmene Corp. .......................................... Finland 37,500 854,852
-----------
1,829,332
-----------
INDUSTRIAL COMPONENTS 4.3%
BTR Plc. ................................................... United Kingdom 405,725 734,310
Krones AG Herman Kronseder Maschinen Fabrik................. Germany 822 26,558
Otra NV .................................................... Netherlands 39,300 510,782
Sandvik AB, A............................................... Sweden 10,400 217,040
Sandvik AB, B............................................... Sweden 11,000 230,264
SKF AB, A .................................................. Sweden 26,000 328,547
</TABLE>
16
PAGE
TEMPLETON GREATER EUROPEAN FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
--------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
INDUSTRIAL COMPONENTS (CONT.)
SKF AB, B................................................... Sweden 8,000 $ 99,049
Sylea SA.................................................... France 3,300 187,232
-----------
2,333,782
-----------
INSURANCE .6%
*Zurich Allied AG .......................................... Switzerland 700 347,396
-----------
LEISURE & TOURISM .7%
Rank Group Plc. ............................................ United Kingdom 97,700 386,855
-----------
MACHINERY & ENGINEERING 4.6%
Bullough Plc. .............................................. United Kingdom 584,800 844,742
Laird Group Plc. ........................................... United Kingdom 156,500 418,883
Mckechnie Group Plc. ....................................... United Kingdom 78,400 347,074
Rauma OY.................................................... Finland 29,600 337,381
VA Technologie AG........................................... Austria 5,900 534,840
-----------
2,482,920
-----------
MERCHANDISING 2.7%
Gucci Group NV.............................................. Netherlands 6,400 231,200
House of Fraser Plc. ....................................... United Kingdom 231,400 326,392
Moebel Walther AG........................................... Germany 5,600 222,814
Storehouse Plc. ............................................ United Kingdom 148,312 442,335
W.H. Smith Group............................................ United Kingdom 25,290 209,948
-----------
1,432,689
-----------
METALS & MINING 4.3%
Billiton Plc. .............................................. United Kingdom 300,000 666,593
British Steel Plc. ......................................... United Kingdom 90,000 163,271
Elkem AS ................................................... Norway 61,900 685,743
Eramet SA .................................................. France 8,980 245,937
Pechiney SA, A ............................................. France 15,879 549,056
-----------
2,310,600
-----------
MULTI-INDUSTRY 2.1%
Elementis Plc. ............................................. United Kingdom 48,066 65,755
Inchcape Plc. .............................................. United Kingdom 198,900 392,094
Pilkington Plc. ............................................ United Kingdom 424,900 415,195
*Saab AB, B................................................. Sweden 30,050 258,903
-----------
1,131,947
-----------
REAL ESTATE .9%
Wereldhave NV............................................... Netherlands 8,225 483,888
-----------
RECREATION & OTHER CONSUMER GOODS .1%
Fila Holding SpA, ADR....................................... Italy 4,400 37,400
-----------
</TABLE>
17
PAGE
TEMPLETON GREATER EUROPEAN FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
--------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS 2.5%
British Telecommunications Plc. ............................ United Kingdom 37,430 $ 500,602
Rostelekom.................................................. Russia 168,000 52,080
Rostelecom, ADR............................................. Russia 56,000 112,000
Tele Danmark AS, B.......................................... Denmark 2,050 203,548
Telecom Italia SpA, di Risp................................. Italy 74,750 348,633
Telefonica SA............................................... Spain 2,800 102,094
-----------
1,318,957
-----------
TEXTILES & APPAREL
Dawson International Plc. .................................. United Kingdom 74,822 24,159
-----------
TRANSPORTATION 3.4%
Danzas Holding AG........................................... Switzerland 2,200 550,675
Koninklijke Nedlloyd Groep NV............................... Netherlands 6,250 82,557
Kvaerner ASA, A............................................. Norway 18,400 233,670
Peninsular & Oriental Steam Navigation Co. ................. United Kingdom 40,300 385,919
Stolt Nielsen SA, ADR....................................... Norway 6,000 70,500
Transport Development Group Plc. ........................... United Kingdom 22,608 87,022
Vosper Thornycroft Holdings Plc. ........................... United Kingdom 43,000 419,083
-----------
1,829,426
-----------
UTILITIES ELECTRICAL & GAS 5.2%
BG Plc. .................................................... United Kingdom 35,294 245,165
Electrabel SA............................................... Belgium 3,249 1,281,137
Empresa Nacional Hidroelectrica del Ribagorzana SA, B....... Spain 5,500 121,371
Iberdrola SA ............................................... Spain 48,200 804,097
Mosenergo, ADR, 144A........................................ Russia 13,500 8,944
National Grid Group Plc. ................................... United Kingdom 25,500 189,157
Thames Water Group Plc. .................................... United Kingdom 6,192 123,749
-----------
2,773,620
-----------
WHOLESALE & INTERNATIONAL TRADE 1.0%
Dahl International AB....................................... Sweden 44,500 562,320
-----------
TOTAL COMMON STOCKS (COST $49,654,447)...................... 38,490,568
-----------
PREFERRED STOCKS 3.9%
Ballast Nedam NV, ctf., cvt., pfd. ......................... Netherlands 5,000 167,104
Baumax AG, pfd. ............................................ Austria 6,953 144,860
BBS Kraftfahrzeugtechnik AG, pfd. .......................... Germany 1,500 287,193
Fiat SpA, pfd. ............................................. Italy 139,500 218,395
Krones AG Herman Kronseder Maschinen Fabrik, pfd. .......... Germany 1,918 61,969
Volkswagen AG, pfd. ........................................ Germany 26,000 1,190,056
-----------
TOTAL PREFERRED STOCKS (COST $2,522,011).................... 2,069,577
-----------
</TABLE>
18
PAGE
TEMPLETON GREATER EUROPEAN FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (COST $16,327,173) 30.4%
U.S. Treasury Bills, 4.385% to 5.035% with maturities to
2/04/99................................................... United States $16,498,000 $16,349,892
-----------
TOTAL INVESTMENTS (COST $68,503,631) 105.9%................. 56,910,037
OTHER ASSETS, LESS LIABILITIES (5.9%)....................... (3,169,736)
-----------
TOTAL NET ASSETS 100.0%..................................... $53,740,301
-----------
-----------
</TABLE>
*Non-income producing.
**Securities traded in U.S. dollars.
See Notes to Financial Statements.
19
PAGE
TEMPLETON GREATER EUROPEAN FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value (cost $68,503,631)..... $ 56,910,037
Cash....................................................... 7,479
Receivables:
Investment securities sold................................ 7,865
Fund shares sold.......................................... 663,224
Dividends and interest.................................... 231,325
------------
Total assets.......................................... 57,819,930
------------
Liabilities:
Payables:
Investment securities purchased........................... 795,106
Fund shares redeemed...................................... 2,907,410
To affiliates............................................. 218,658
Accrued expenses........................................... 158,455
------------
Total liabilities..................................... 4,079,629
------------
Net assets, at value........................................ $ 53,740,301
------------
------------
Net assets consist of:
Undistributed net investment income........................ $ 572,304
Net unrealized depreciation................................ (11,593,594)
Accumulated net realized gain.............................. 1,588,844
Beneficial shares.......................................... 63,172,747
------------
Net assets, at value........................................ $ 53,740,301
------------
------------
CLASS I:
Net asset value per share ($41,310,481 / 3,562,813 shares
outstanding)............................................. $11.59
------------
------------
Maximum offering price per share ($11.59 / 94.25%)......... $12.30
------------
------------
CLASS II:
Net asset value per share ($12,213,640 / 1,065,179 shares
outstanding)*............................................ $11.47
------------
------------
Maximum offering price per share ($11.47 / 99.00%)......... $11.59
------------
------------
ADVISOR CLASS:
Net asset value and maximum offering price per share
($216,180 / 18,574 shares outstanding)................... $11.64
------------
------------
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See Notes to Financial Statements.
20
PAGE
TEMPLETON GREATER EUROPEAN 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 $97,697)
Dividends.................................................. $ 571,886
Interest................................................... 542,103
----------
Total investment income............................... $ 1,113,989
Expenses:
Management fees (Note 3)................................... 200,453
Administrative fees (Note 3)............................... 40,091
Distribution fees (Note 3)
Class I................................................... 71,214
Class II.................................................. 57,042
Transfer agent fees (Note 3)............................... 43,000
Custodian fees............................................. 16,000
Reports to shareholders.................................... 50,000
Registration and filing fees............................... 29,860
Professional fees.......................................... 10,000
Trustees' fees and expenses................................ 3,000
Amortization of organization costs......................... 6,639
Other...................................................... 2,750
----------
Total expenses........................................ 530,049
------------
Net investment income........................... 583,940
------------
Realized and unrealized gains (losses):
Net realized gain from:
Investments............................................... 1,615,758
Foreign currency transactions............................. 2,141
----------
Net realized gain..................................... 1,617,899
Net unrealized depreciation on investments............ (15,562,230)
------------
Net realized and unrealized loss............................ (13,944,331)
------------
Net decrease in net assets resulting from operations........ $(13,360,391)
------------
------------
</TABLE>
See Notes to Financial Statements.
21
PAGE
TEMPLETON GREATER EUROPEAN 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..................................... $ 583,940 $ 298,473
Net realized gain from investments and foreign currency
transactions............................................ 1,617,899 1,213,778
Net unrealized appreciation (depreciation) on
investments.............................................. (15,562,230) 2,800,101
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (13,360,391) 4,312,352
Distributions to shareholders from:
Net investment income:
Class I.................................................. (92,907) (207,163)
Class II................................................. (21,080) (43,475)
Advisor Class............................................ (6,716) (905)
Net realized gains:
Class I.................................................. (185,200) (998,765)
Class II................................................. (58,259) (303,072)
Advisor Class............................................ (11,890) (3,694)
Fund share transactions (Note 2):
Class I.................................................. 32,491,449 8,101,372
Class II................................................. 9,280,768 2,853,411
Advisor Class............................................ 238,038 27,981
---------------------------------------
Net increase in net assets.............................. 28,273,812 13,738,042
Net assets:
Beginning of period........................................ 25,466,489 11,728,447
---------------------------------------
End of period.............................................. $ 53,740,301 $25,466,489
---------------------------------------
---------------------------------------
Undistributed net investment income included in net assets:
End of period.............................................. $ 572,304 $ 109,067
---------------------------------------
---------------------------------------
</TABLE>
See Notes to Financial Statements.
22
PAGE
TEMPLETON GREATER EUROPEAN FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Greater European Fund (the Fund) is a separate, diversified series of
Templeton Global Investment Trust (the Trust), which is an open-end investment
company registered under the Investment Company Act of 1940. The Fund seeks to
achieve long-term capital appreciation by investing, under normal market
conditions, at least 75% of its total assets in the equity securities of Greater
European 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.
23
PAGE
TEMPLETON GREATER EUROPEAN 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 three classes of shares: Class I, Class II, and Advisor Class
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 was an unlimited number of shares of beneficial
interest authorized ($0.01 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................................................. 5,384,061 $ 74,546,858 1,202,564 $15,820,682
Shares issued on reinvestment of distributions.............. 17,788 261,115 92,488 1,117,164
Shares redeemed............................................. (3,203,441) (42,316,524) (681,131) (8,836,474)
-----------------------------------------------------------
Net increase................................................ 2,198,408 $ 32,491,449 613,921 $ 8,101,372
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
24
PAGE
TEMPLETON GREATER EUROPEAN 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................................................. 1,031,131 $14,430,864 283,511 $ 3,671,637
Shares issued on reinvestment of distributions.............. 5,054 73,506 27,106 325,541
Shares redeemed............................................. (389,779) (5,223,602) (89,455) (1,143,767)
--------------------------------------------------------
Net increase................................................ 646,406 $ 9,280,768 221,162 $ 2,853,411
--------------------------------------------------------
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31, 1998
--------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold................................................. 626,775 $ 9,055,358 186,400 $ 2,341,970
Shares issued on reinvestment of distributions.............. 1,249 18,405 380 4,600
Shares redeemed............................................. (615,263) (8,835,725) (183,909) (2,318,589)
--------------------------------------------------------
Net increase................................................ 12,761 $ 238,038 2,871 $ 27,981
--------------------------------------------------------
--------------------------------------------------------
</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 1.85%, 2.50%, and 1.50% of the Fund's
average daily net assets of Class I, Class II, and Advisor Class shares,
25
PAGE
TEMPLETON GREATER EUROPEAN FUND
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
respectively, through August 1, 1999. For the six months ended September 30,
1998, no reimbursement was necessary.
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 $244,073. Distributors
received net commissions from sales of Fund shares and received contingent
deferred sales charges for the period of $19,375 and $7,541, respectively.
4. INCOME TAXES
The cost of securities for 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..................................... $ 1,835,468
Unrealized depreciation..................................... (13,429,062)
------------
Net unrealized depreciation................................. $(11,593,594)
============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1998 aggregated $41,216,865 and $3,802,827,
respectively.
26
PAGE
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PAGE
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PAGE
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin 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 GREATER EUROPEAN 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 the current prospectus of
Templeton Greater European 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.
419 S98 11/98 [RECYCLE LOGO] Printed on recycled paper
