SEMI ANNUAL
REPORT
SEPTEMBER 30, 1998
TEMPLETON GLOBAL
INFRASTRUCTURE FUND
[LOGO]
Franklin Templeton
PAGE
[PHOTO MARK G. HOLOWESKO]
MARK G. HOLOWESKO, CFA
President
Templeton Global Investment Trust
[CELEBRATING OVER 50 YEARS SEAL]
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.
PAGE
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter ............... 1
Performance Summaries
Class I ....................... 6
Class II ...................... 8
Financial Highlights &
Statement of Investments .........10
Financial Statements .............16
Notes to Financial
Statements .......................19
</TABLE>
FUND CATEGORY
[PYRAMID GRAPH]
SHAREHOLDER LETTER
Your Fund's Goal: Templeton Global Infrastructure Fund seeks long-term capital
growth by a flexible policy of investing at least 65% of its total assets in the
equity and debt securities of U.S. and foreign companies that are principally
engaged in or related to the development, operation or rehabilitation of the
physical and social infrastructures of any nation.
Dear Shareholder:
This semiannual report covers the six months ended September 30, 1998, a
tumultuous time for world equity markets. During the period, Asia's economic
malaise spread to other regions, causing abysmal stock market performance in
developing countries and contributing to weakened equity performance in many
developed markets. Although some European and North American indices reached new
peaks during the period, most fell sharply in August and finished the period
well below their highs. Within this environment, Templeton Global Infrastructure
Fund - Class I posted a
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 12 of
this report.
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
9/30/98
[GRAPH]
<TABLE>
<CAPTION>
<S> <C>
Europe 35.4%
Latin America 19.8%
Asia 17.5%
United States 16.2%
Canada 6.2%
Australia & New Zealand 3.7%
Short-Term Investments &
Other Net Assets 1.2%
</TABLE>
- - 25.72% cumulative total return for the six-month period ended September 30,
1998, as discussed in the Performance Summary on page 6.
Economic troubles spreading around the globe during the reporting period had
some positive effects initially as sluggish Asian economic growth and lower
commodity prices contributed to benign global inflation and relatively low U.S.
and European interest rates. However, these lower interest rates did little to
benefit emerging markets because interest rates there did not fall in tandem
with those of the U.S. and Europe. As capital fled emerging-market countries,
some governments raised interest rates in an effort to convince investors to
remain invested. These relatively high interest rates contributed to
recessionary conditions and hurt corporate profits in many developing countries.
Infrastructure-related stocks, especially of companies deriving profits from
projects in Brazil, Mexico, South Korea, China, and Argentina, generally
performed poorly during the period under review. In places like Mexico and South
Korea, for example, many stocks were priced as though recessionary conditions in
those countries were permanent. Believing that such low valuations were
extraordinary, we were able to find attractive investment opportunities for the
Fund around the world. For instance, Ericsson Telecommunicacoes SA, pfd. is a
Brazilian subsidiary of the well-known Swedish telecommunications company, L.M.
Ericsson. We could have purchased shares in the parent company, but our analysis
indicated the subsidiary could be a better
2
PAGE
TOP 10 HOLDINGS
9/30/98
<TABLE>
<CAPTION>
COMPANY, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
<S> <C>
Iberdrola SA,
Utilities Electrical & Gas, Spain 3.1%
YPF Sociedad Anonima, ADR,
Energy Sources, Argentina 2.7%
First Tractor Company Ltd.,
Machinery & Engineering, China 2.5%
Autoliv Inc.,
Automobiles, Sweden 2.5%
British Steel Plc., ADR,
Metals & Mining, United Kingdom 2.4%
Hong Kong
Telecommunications Ltd.,
Telecommunications, Hong Kong* 2.4%
Motorola Inc.,
Electrical & Electronics, U.S. 2.3%
Telefonica de Argentina
SA, B, ADR,
Telecommunications, Argentina 2.3%
3Com Corp.,
Data Processing &
Reproduction, U.S. 2.2%
Gradall Industries Inc.,
Machinery & Engineering, U.S. 2.1%
</TABLE>
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
value because its share price to earnings ratio was lower than that of the
parent. We also were of the opinion that the Brazilian subsidiary had more
favorable growth prospects than the parent company. Just a couple of months
after the Fund purchased these shares, we were able to sell them for
significantly more than what we had paid. We believe that our diligent and
thorough analysis may uncover more such bargains for the Fund.
However, buying relatively inexpensive stocks can be a risky business,
particularly in the short term, because such securities tend to have what stock
analysts call "negative momentum." A stock's short-term performance can suffer
when it is being sold primarily on emotion rather than reason, and the prices of
some stocks that the Fund purchased during the period have fallen to what we
consider ridiculously low valuations. In such situations, we may purchase
additional shares when we believe our original reasons for purchasing these
stocks have not changed.
During the period, we decreased the Fund's exposure to Europe from 42.9% of
total net assets on March 31, 1998, to 35.4% on September 30, 1998. Our
exposure to U.S. investments decreased from 17.9% to 16.2%. We increased the
Fund's exposure to Latin America from 15.3% to 19.8%, and to Asia from 12.7% to
17.5%. Industry exposure shifted slightly, with increases in the energy sources
and materials sectors and a small decrease in the capital equipment sector.
3
PAGE
Looking forward, we do not expect the world's economic problems to fix
themselves overnight. However, we believe it is reasonable to expect that the
economies of most countries now experiencing recessionary conditions should
start growing within three to five years. Although many of the investments we
made in the six months under review were not profitable as of the end of the
period, this does not necessarily mean that they were bad investments. During
the reporting period, we purchased stocks for the Fund at what we believed to be
uncommonly attractive prices, and believe that our time-tested style of value
investing may benefit our shareholders in the future.
Please remember that 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 management and investment philosophy.
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 related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity.
Investing in any emerging market means
4
PAGE
accepting a certain amount of volatility and, in some cases, severe market
corrections. While short-term volatility can be disconcerting, declines of as
much as 40% to 50% are not unusual in emerging markets. For example, the Hong
Kong equity market has increased 939% in the last 15 years, but has suffered
five declines of more than 20% during that time.(1) These risks and other
considerations are discussed in the Fund's prospectus.
We appreciate your participation in Templeton Global Infrastructure Fund and
welcome your comments or suggestions.
Sincerely,
/s/ Mark G. Holowesko
Mark G. Holowesko, CFA
President
Templeton Global Investment Trust
/s/ Tucker Scott
Tucker Scott
Portfolio Manager
Templeton Global Infrastructure Fund
1. Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended September 30, 1998. Market returns are measured in Hong Kong dollars.
5
PAGE
PERFORMANCE SUMMARY
CLASS I
Templeton Global Infrastructure Fund - Class I posted a - 25.72% cumulative
total return for the six-month period ended September 30, 1998. Cumulative total
return represents 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 $3.78, from
$12.49 on March 31, 1998, to $8.71 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 4.0 cents ($0.0400) in
dividend income, 2.5 cents ($0.0250) in short-term capital gains, and 68.5 cents
($0.6850) 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 (3/14/94)
<S> <C> <C> <C>
Cumulative Total Return(1) -28.87% -1.06% 5.07%
Average Annual Total Return(2) -32.94% -2.29% -0.21%
Value of $10,000 Investment(3) $6,706 $9,328 $9,903
</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.
From March 14, 1994 through April 15, 1995, expense waivers by the Fund's
Business Manager increased the Fund's total return. If the Business Manager had
not taken this action, total returns for Class I shares would have been lower.
Past performance is not predictive of future results.
7
PAGE
CLASS II
Templeton Global Infrastructure Fund - Class II posted a -25.92% cumulative
total return for the six-month period ended September 30, 1998. Cumulative total
return represents 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 $3.76, from
$12.37 on March 31, 1998, to $8.61 on September 30, 1998. During the reporting
period, shareholders received per-share distributions of 2.41 cents ($0.0241) in
dividend income, 2.5 cents ($0.0250) in short-term capital gains, and 68.5 cents
($0.6850) 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 (5/1/95)
<S> <C> <C> <C>
Cumulative Total Return(1) -29.34% -2.92% 5.33%
Average Annual Total Return(2) -30.74% -1.33% 1.23%
Value of $10,000 Investment(3) $6,924 $9,607 $10,426
</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.
Past performance is not predictive of future results.
9
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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..... $12.49 $11.54 $10.04 $9.43 $10.01 $10.00
----------------------------------------------------------------------------------
Income from investment operations:
Net investment income................... .11 .12 .17 .04 .07 .009
Net realized and unrealized gains
(losses).............................. (3.14) 1.54 1.45 1.03 (.61) .001
----------------------------------------------------------------------------------
Total from investment operations......... (3.03) 1.66 1.62 1.07 (.54) .01
----------------------------------------------------------------------------------
Less distributions from:
Net investment income................... (.04) (.18) (.07) (.05) (.04) --
Net realized gains...................... (.71) (.53) (.05) (.41) -- --
----------------------------------------------------------------------------------
Total distributions...................... (.75) (.71) (.12) (.46) (.04) --
----------------------------------------------------------------------------------
Net asset value, end of period........... $8.71 $12.49 $11.54 $10.04 $9.43 $10.01
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Total Return*............................ (25.72)% 15.00% 16.22% 11.79% (5.41)% .10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........ $18,519 $28,910 $28,011 $21,590 $18,717 $101
Ratios to average net assets:
Expenses................................ 1.88%** 1.82% 2.08% 2.32% 1.25% 1.25%**
Expenses, excluding waiver and payments
by affiliate.......................... 1.88%** 1.82% 2.08% 2.37% 3.25% 32.02%**
Net investment income................... 1.91%** .89% 1.59% .40% 1.38% 1.89%**
Portfolio turnover rate.................. 26.61% 27.26% 23.52% 38.22% 3.21% .00%
</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.
10
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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........................ $12.37 $11.46 $9.99 $9.73
-------------------------------------------------------
Income from investment operations:
Net investment income (loss)............................... .07 .03 .11 (.02)
Net realized and unrealized gains (losses)................. (3.10) 1.52 1.43 .73
-------------------------------------------------------
Total from investment operations............................ (3.03) 1.55 1.54 .71
-------------------------------------------------------
Less distributions from:
Net investment income...................................... (.02) (.11) (.02) (.04)
Net realized gains......................................... (.71) (.53) (.05) (.41)
-------------------------------------------------------
Total distributions......................................... (.73) (.64) (.07) (.45)
-------------------------------------------------------
Net asset value, end of period.............................. $8.61 $12.37 $11.46 $9.99
-------------------------------------------------------
-------------------------------------------------------
Total Return*............................................... (25.92)% 14.13% 15.48% 7.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $2,974 $4,209 $2,844 $1,379
Ratios to average net assets:
Expenses................................................... 2.53%** 2.47% 2.73% 2.97%**
Net investment income (loss)............................... 1.26%** .17% .98% (.88)%**
Portfolio turnover rate..................................... 26.61% 27.26% 23.52% 38.22%
</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.
11
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 93.3%
AUTOMOBILES 3.6%
Autoliv Inc. ............................................... Sweden 5,100 $ 156,883
Autoliv Inc., fgn. ......................................... Sweden 13,700 376,750
Weifu Fuel Injection Co. Ltd. .............................. China 800,000 238,498
-----------
772,131
-----------
BUILDING MATERIALS & COMPONENTS 6.0%
Anglian Group Plc. ......................................... United Kingdom 40,000 123,037
Cementos Diamante SA, ADR, 144A ............................ Colombia 28,500 85,500
Det Danske Traelastkompagni AS.............................. Denmark 4,300 372,148
Plettac AG.................................................. Germany 3,100 263,380
Svedala Industri, A......................................... Sweden 28,500 436,531
-----------
1,280,596
-----------
BUSINESS & PUBLIC SERVICES .7%
TNT Post Group NV........................................... Netherlands 6,200 157,874
-----------
CONSTRUCTION & HOUSING .5%
Sociedade Construcoes Soares da Costa SA.................... Portugal 14,200 108,604
-----------
DATA PROCESSING & REPRODUCTION 3.4%
*3Com Corp. ................................................ United States 16,000 481,000
*Newbridge Networks Corp. .................................. Canada 14,400 258,300
-----------
739,300
-----------
ELECTRICAL & ELECTRONICS 4.4%
Gold Peak Industries (Holdings) Ltd. ....................... Hong Kong 352,000 59,965
Motorola Inc. .............................................. United States 11,600 495,175
Philips Electronics NV...................................... Netherlands 7,100 382,298
-----------
937,438
-----------
ENERGY SOURCES 4.8%
*Northstar Energy Corp. .................................... Canada 24,700 172,359
*Ranger Oil Ltd. ........................................... Canada 41,100 269,719
YPF Sociedad Anonima, ADR................................... Argentina 22,200 577,200
-----------
1,019,278
-----------
FINANCIAL SERVICES .9%
Housing Development Finance Corp. Ltd. ..................... India 3,255 185,653
-----------
FOREST PRODUCTS & PAPER 2.4%
Munksjo AB.................................................. Sweden 39,000 256,366
Weyerhaeuser Co. ........................................... United States 6,000 253,125
-----------
509,491
-----------
</TABLE>
12
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
INDUSTRIAL COMPONENTS 4.6%
BTR Plc. ................................................... United Kingdom 156,812 $ 283,809
Granges AB.................................................. Sweden 9,850 119,440
Madeco Manufacturera de Cobre SA, ADR....................... Chile 24,600 169,125
*Shaw Group Inc. ........................................... United States 9,400 81,075
Weir Group Plc. ............................................ United Kingdom 112,800 332,588
-----------
986,037
-----------
MACHINERY & ENGINEERING 7.9%
First Tractor Company Limited............................... China 2,114,000 545,654
*Gradall Industries Inc. ................................... United States 30,000 442,500
Maezawa Kyuso Industries Co. ............................... Japan 64,000 258,595
SNC-Lavalin Group Inc., A................................... Canada 31,800 208,361
VA Technologie AG........................................... Austria 2,680 242,944
-----------
1,698,054
-----------
MERCHANDISING 1.0%
Grupo Imsa SA de CV, ADR.................................... Mexico 22,200 216,450
-----------
METALS & MINING 5.3%
British Steel Plc., ADR..................................... United Kingdom 28,700 521,981
Minorco SA, ADR............................................. Luxembourg 16,900 173,225
Oregon Steel Mills Inc. .................................... United States 27,100 318,425
Pohang Iron & Steel Co. Ltd. ............................... South Korea 3,400 134,092
-----------
1,147,723
-----------
MISC MATERIALS & COMMODITIES .9%
Agrium Inc. ................................................ Canada 23,200 197,200
-----------
MULTI-INDUSTRY 4.1%
Alfa SA de CV, A ........................................... Mexico 58,500 149,264
Foster Wheeler Corp. ....................................... United States 7,500 103,125
La Cemento Nacional SA, GDR................................. Ecuador 400 52,000
La Cemento Nacional SA, GDR, 144A........................... Ecuador 1,400 182,000
Metra OY, B................................................. Finland 20,600 400,778
-----------
887,167
-----------
REAL ESTATE 1.9%
City Developments Ltd. ..................................... Singapore 52,000 114,204
Taylor Woodrow Plc. ........................................ United Kingdom 97,300 300,941
-----------
415,145
-----------
TELECOMMUNICATIONS 19.8%
AT&T Corp. ................................................. United States 6,250 365,234
Compania Anonima Nacional Telefonos de Venezuela, ADR....... Venezuela 11,200 190,400
*Embratel Participacoes SA.................................. Brazil 9,665,900 80,739
Hong Kong Telecommunications Ltd. .......................... Hong Kong 260,000 511,712
</TABLE>
13
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS (CONT.)
Koninklijke KPN NV.......................................... Netherlands 6,200 $ 191,422
*Mastec Inc. ............................................... United States 24,000 387,000
*Millicom International Cellular SA......................... Luxembourg 11,100 273,338
Northern Telecom, Ltd. ..................................... Canada 6,900 220,800
SBC Communications Inc. .................................... Mexico 7,900 334,763
*Tele Celular Sul Participacoes SA.......................... Brazil 9,665,900 7,340
*Tele Centro Oeste Celular Participacoes SA................. Brazil 9,665,900 5,138
*Tele Centro Sul Participacoes SA........................... Brazil 9,665,900 61,574
*Tele Leste Celular Participacoes SA........................ Brazil 9,665,900 2,691
*Tele Nordeste Celular Participacoes SA..................... Brazil 9,665,900 4,159
*Tele Norte Celular Participacoes SA........................ Brazil 9,665,900 2,039
*Tele Norte Leste Participacoes SA.......................... Brazil 9,665,900 61,166
*Tele Sudeste Celular Participacoes SA...................... Brazil 9,665,900 16,311
Telecom Italia SpA, di Risp................................. Italy 65,050 303,392
Telecomunicacoes Brasileiras SA (Telebras).................. Brazil 9,665,900 2,039
Teledanmark AS, ADS......................................... Denmark 4,660 224,263
Telefonica de Argentina SA, B, ADR.......................... Argentina 16,600 488,663
Telefonica del Peru SA, B................................... Peru 115,000 141,231
Telefonos de Mexico SA (Telmex), ADR, L..................... Mexico 4,010 177,443
*Telemig Celular Participacoes SA........................... Brazil 9,665,900 5,423
*Telesp Celular Participacoes SA............................ Brazil 9,665,900 40,778
*Telesp Participacoes SA.................................... Brazil 9,665,900 151,692
-----------
4,250,750
-----------
TRANSPORTATION 7.5%
Air New Zealand Ltd., B..................................... New Zealand 134,000 105,966
*Fritz Companies Inc. ...................................... United States 27,200 185,300
Great Eastern Shipping Co. Ltd., GDR, 144A.................. India 46,900 120,768
Guangshen Railway Co. Ltd., ADR............................. China 60,750 406,266
GZI Transport Ltd. ......................................... China 86,000 17,980
*GZI Transport Ltd., wts., 144A............................. China 17,200 22
Mayne Nickless Ltd., A...................................... Australia 70,400 375,249
*Osprey Maritime Ltd. ...................................... Singapore 349,500 103,728
Qantas Airways Ltd., ADR, 144A.............................. Australia 19,300 301,466
-----------
1,616,745
-----------
UTILITIES ELECTRICAL & GAS 13.6%
*Centrica Plc. ............................................. United Kingdom 175,000 337,545
*CEZ AS..................................................... Czech Republic 9,600 177,628
Gener SA, ADR............................................... Chile 8,700 129,956
Guangdong Electric Power Development Co Ltd., B............. China 1,060,800 361,426
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 99,500 342,218
Iberdrola SA................................................ Spain 39,600 660,627
Korea Electric Power Corp. ................................. South Korea 10,300 142,937
National Power Plc. ........................................ United Kingdom 20,000 184,046
</TABLE>
14
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
UTILITIES ELECTRICAL & GAS (CONT.)
Shandong Huaneng Power Development Co. Ltd., ADR............ China 49,400 $ 222,300
Texas Utilities Holding Co. ................................ United States 8,000 372,500
-----------
2,931,183
-----------
TOTAL COMMON STOCKS (COST $24,801,593)...................... 20,056,819
-----------
PREFERRED STOCKS 5.5%
Ballast Nedam NV, ctf., cvt., pfd. ......................... Netherlands 7,608 254,266
Banco Bradesco SA, pfd. .................................... Brazil 38,400,000 226,797
Brasmotor SA, pfd. ......................................... Brazil 2,200,000 190,263
Cia Vale do Rio Doce, ADR, pfd. ............................ Brazil 15,200 230,847
Confab Industrial SA, pfd. ................................. Brazil 121,000 102,092
Petroleo Brasileiro SA (Petrobras), pfd. ................... Brazil 1,679,000 172,816
-----------
TOTAL PREFERRED STOCKS (COST $1,825,870).................... 1,177,081
-----------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT (COST
$26,627,463).............................................. 21,233,900
-----------
<CAPTION>
PRINCIPAL
AMOUNT**
----------
<S> <C> <C> <C>
REPURCHASE AGREEMENT 1.6%
(a)Swiss Bank Corp., 5.50%, 10/01/98 (Maturity Value
$339,052) (COST $339,000) Collateralized by U.S. Treasury
Notes and Bonds........................................... $ 339,000 339,000
-----------
TOTAL INVESTMENTS (COST $26,966,463) 100.4%................. 21,572,900
OTHER ASSETS, LESS LIABILITIES (.4%)........................ (80,246)
-----------
TOTAL NET ASSETS 100.0%..................................... $21,492,654
-----------
-----------
</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.
See Notes to Financial Statements.
15
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $26,627,463)..... $21,233,900
Repurchase agreement, at value and cost.................... 339,000
Cash....................................................... 77,276
Receivables:
Fund shares sold.......................................... 7,252
Dividends and interest.................................... 79,988
-----------
Total assets.......................................... 21,737,416
-----------
Liabilities:
Payables:
Fund shares redeemed...................................... 188,355
To affiliates............................................. 33,181
Accrued expenses........................................... 23,226
-----------
Total liabilities..................................... 244,762
-----------
Net assets, at value........................................ $21,492,654
-----------
-----------
Net assets consist of:
Undistributed net investment income........................ $ 243,668
Net unrealized depreciation................................ (5,393,563)
Accumulated net realized gain.............................. 1,230,100
Beneficial shares.......................................... 25,412,449
-----------
Net assets, at value........................................ $21,492,654
-----------
-----------
CLASS I:
Net asset value per share ($18,518,915 / 2,125,565 shares
outstanding)............................................. $8.71
-----------
-----------
Maximum offering price per share ($8.71 / 94.25%).......... $9.24
-----------
-----------
CLASS II:
Net asset value per share ($2,973,739 / 345,541 shares
outstanding)*............................................ $8.61
-----------
-----------
Maximum offering price per share ($8.61 / 99.00%).......... $8.70
-----------
-----------
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See Notes to Financial Statements.
16
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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 $45,689)
Dividends.................................................. $ 517,690
Interest................................................... 13,741
----------
Total investment income............................... $ 531,431
Expenses:
Management fees (Note 3)................................... 105,092
Administrative fees (Note 3)............................... 21,019
Distribution fees (Note 3)
Class I................................................... 42,488
Class II.................................................. 19,052
Transfer agent fees (Note 3)............................... 24,000
Custodian fees............................................. 12,450
Reports to shareholders.................................... 19,000
Registration and filing fees............................... 16,000
Professional fees.......................................... 9,000
Trustees' fees and expenses................................ 1,000
Amortization of organization costs......................... 7,071
Other...................................................... 31
----------
Total expenses........................................ 276,203
-----------
Net investment income........................... 255,228
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 1,268,193
Foreign currency transactions............................. (5,368)
----------
Net realized gain..................................... 1,262,825
Net unrealized depreciation on investments............ (9,391,093)
-----------
Net realized and unrealized loss............................ (8,128,268)
-----------
Net decrease in net assets resulting from operations........ $(7,873,040)
-----------
-----------
</TABLE>
See Notes to Financial Statements.
17
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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..................................... $ 255,228 $ 273,899
Net realized gain from investments and foreign currency
transactions............................................ 1,262,825 3,099,177
Net unrealized appreciation (depreciation) on
investments.............................................. (9,391,093) 902,736
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (7,873,040) 4,275,812
Distributions to shareholders from:
Net investment income:
Class I.................................................. (87,391) (422,396)
Class II................................................. (8,657) (32,529)
Net realized gains:
Class I.................................................. (1,567,202) (1,282,490)
Class II................................................. (250,238) (182,774)
Beneficial share transactions (Note 2):
Class I.................................................. (1,970,276) (1,276,300)
Class II................................................. 130,685 1,184,703
---------------------------------------
Net increase (decrease) in net assets................... (11,626,119) 2,264,026
Net assets:
Beginning of period........................................ 33,118,773 30,854,747
---------------------------------------
End of period.............................................. $ 21,492,654 $33,118,773
---------------------------------------
---------------------------------------
Undistributed net investment income included in net assets:
End of period.............................................. $ 243,668 $ 84,488
---------------------------------------
---------------------------------------
</TABLE>
See Notes to Financial Statements.
18
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Global Infrastructure Fund (the Fund), is a separate diversified
series of Templeton Global Investment Trust (the Trust), which is an open-end
investment company registered under the Investment Company Act of 1940. The Fund
seeks long-term capital growth by a flexible policy of investing at least 65% of
its total assets in the equity and debt securities of U.S. and foreign companies
that are principally engaged in or related to the development, operation or
rehabilitation of the physical and social infrastructures of any nation
throughout the world. The following summarizes the Fund's significant accounting
policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. 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.
19
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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................................................. 172,236 $ 1,717,240 608,694 $ 7,533,785
Shares issued on reinvestment of distributions.............. 137,236 1,580,954 141,485 1,611,708
Shares redeemed............................................. (498,603) (5,268,470) (862,774) (10,421,793)
---------------------------------------------------------
Net decrease................................................ (189,131) $(1,970,276) (112,595) $ (1,276,300)
---------------------------------------------------------
---------------------------------------------------------
</TABLE>
20
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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................................................. 43,687 $ 479,582 177,194 $ 2,175,334
Shares issued on reinvestment of distributions.............. 21,663 247,181 18,209 205,125
Shares redeemed............................................. (59,965) (596,078) (103,342) (1,195,756)
----------------------------------------------------
Net increase................................................ 5,385 $ 130,685 92,061 $ 1,184,703
----------------------------------------------------
----------------------------------------------------
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton
Investment Counsel, Inc. (TICI), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors) and
Franklin/Templeton Investor Services, Inc. (Investor Services), the Fund's
investment manager, administrative manager, principal underwriter and transfer
agent, respectively.
The Fund pays an investment management fee to TICI of 0.75% per year of the
average daily net assets of the Fund. The Fund pays 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>
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 the unreimbursed costs were $1,311,786.
Distributors received net commissions from sales of Fund shares and received
contingent deferred sales charges for the period of $6,012 and $447,
respectively.
21
PAGE
TEMPLETON GLOBAL INFRASTRUCTURE 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..................................... $ 1,892,956
Unrealized depreciation..................................... (7,286,519)
-----------
Net unrealized depreciation................................. $(5,393,563)
===========
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1998 aggregated $7,202,295 and $9,590,202,
respectively.
22
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
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Mutual Beacon Fund
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FUND ALLOCATOR SERIES
Franklin Templeton Conservative
Target Fund
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Target Fund
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Target Fund
INCOME
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Securities Fund
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Government Securities Fund
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Franklin Floating Rate Trust
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Income Fund
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U.S. Government Securities Fund
Franklin U.S. Government
Securities Fund
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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 GLOBAL
INFRASTRUCTURE 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
Global Infrastructure 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.
413 S98 11/98 [LOGO] Printed on recycled paper
