SHAREHOLDER LETTER
Dear Shareholder:
On October 21, 1999, Templeton Americas Government Securities Fund merged into
Templeton Global Bond Fund. Therefore, this report, which covers the six months
ended September 30, 1999, will be the final one you receive for Templeton
Americas Government Securities Fund.
During the reporting period, U.S. Treasury bond prices declined as the
continuing strength of the U.S. economy led the Federal Reserve Board to raise
domestic interest rates in June 1999 and again in August. In Latin America,
strengthening economies and falling interest rates resulted in increasing prices
for debt securities from those countries. Within this environment, Templeton
Americas Government Securities Fund, which had its largest concentration of
holdings in Latin America (69.3% of total net assets), produced an 11.45%
six-month cumulative total return, as shown in the Performance Summary on page
2.
We thank you for your participation in Templeton Americas Government Securities
Fund and look forward to serving your investment needs in the future.
Sincerely,
The Portfolio Management Team
Templeton Americas Government Securities Fund
CONTENTS
Shareholder Letter 1
Performance Summary 2
Financial Highlights &
Statement of Investments 3
Financial Statements 6
Notes to
Financial Statements 9
Change in Independent
Auditor 12
[PYRAMID GRAPHIC]
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 4 of
this report.
<PAGE>
Subject to the current, maximum 4.25% initial sales charge. The Fund's
Investment Manager and Fund Administrator have agreed in advance to waive a
portion of their respective fees and, in the case of the Fund Administrator, to
make certain payments to reduce expenses, which increases total return to
shareholders. If they had not taken this action, the Fund's total returns would
have been lower. The fee waiver and expense reimbursement may be discontinued at
any time upon notice to the Fund's Board of Trustees.
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 applicable, maximum
sales charge. Six month returns have not been annualized.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic 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. The Fund
may also invest in lower-rated or unrated debt securities that have high credit
risk and may be predominately speculative. You may have a gain or loss when you
sell your shares.
PERFORMANCE SUMMARY AS OF 9/30/99
Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities, as well as the
level of the Fund's operating expenses. Past distributions are not indicative of
future trends. All total returns include reinvested distributions at net asset
value.
PRICE AND DISTRIBUTION INFORMATION
<TABLE>
<CAPTION>
Change 9/30/99 3/31/99
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value -$0.13 $9.47 $9.60
<CAPTION>
Distributions (4/1/99 - 9/30/99)
-------------------------------------------------
<S> <C>
Dividend Income $0.3600
</TABLE>
PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
6-MONTH 1-YEAR 5-YEAR (6/27/94)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 2.43% 11.45% 49.77% 50.96%
Average Annual Total Return(2) -1.97% 6.69% 7.49% 7.26%
</TABLE>
2 Past performance is not predictive of future results.
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Highlights
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED MARCH 31,
-----------------------------------------------------------------
(UNAUDITED)++ 1999 1998 1997 1996 1995+
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout
the period)
Net asset value, beginning of period ...... $ 9.60 $ 10.68 $ 10.64 $ 10.20 $ 9.59 $ 10.00
---------------------------------------------------------------------------------
Income from investment operations:
Net investment income .................... .41 .74 .73 .74 .75 .30
Net realized and unrealized gains (losses) (.18) (1.03) .68 .85 .71 (.43)
---------------------------------------------------------------------------------
Total from investment operations .......... .23 (.29) 1.41 1.59 1.46 (.13)
---------------------------------------------------------------------------------
Less distributions from:
Net investment income .................... (.36) (.74) (.72) (.77) (.69) (.28)
Net realized gains ....................... -- (.05) (.65) (.38) (.16) --
---------------------------------------------------------------------------------
Total distributions ....................... (.36) (.79) (1.37) (1.15) (.85) (.28)
---------------------------------------------------------------------------------
Net asset value, end of period ............ $ 9.47 $ 9.60 $ 10.68 $ 10.64 $ 10.20 $ 9.59
================================================================================
Total Return* ............................. 2.43% (2.54)% 14.21% 16.23% 15.49% (1.33)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......... $ 17,815 $ 22,269 $ 14,973 $ 5,627 $ 3,540 $ 2,826
Ratios to average net assets:
Expenses ................................. 1.25%** 1.25% 1.25% 1.25% 1.25% 1.25%**
Expenses, excluding waiver and
payments by affiliate .................. 1.72%** 1.59% 1.89% 2.79% 4.98% 6.49%**
Net investment income .................... 8.62%** 7.70% 7.11% 7.16% 7.47% 5.07%**
Portfolio turnover rate ................... 1.03% 56.32% 70.79% 275.02% 163.57% --
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+For the period June 27, 1994 (commencement of operations) to March 31, 1995.
++Based on average weighted shares outstanding.
See notes to financial statements. 3
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM SECURITIES 96.7%
ARGENTINA 15.2%
Bridas Corp., 12.50%, 11/15/99 ............................. 50,000 $ 50,250
Republic of Argentina:
9.25%, 2/23/01 ........................................... 555,000 540,431
8.875%, 5/09/02 .......................................... 1,625,000 1,509,219
11.00%, 10/09/06 ......................................... 225,000 215,859
Reg S, 11.75%, 2/12/07 ................................... 80,000 ARS 68,914
11.375%, 1/30/17 ......................................... 200,000 188,625
9.75%, 9/19/27 ........................................... 150,000 126,000
----------
2,699,298
----------
BRAZIL 13.7%
Companhia Paranaense De Energia-Copel, Reg S, 9.75%, 5/02/05 450,000 405,000
Government of Brazil:
8.875%, 11/05/01 ......................................... 250,000 247,500
11.625%, 4/15/04 ......................................... 200,000 187,750
9.375%, 4/07/08 .......................................... 800,000 635,000
Series L, FRN, 5.938%, 4/15/12 ........................... 310,000 186,000
5.00%, 4/15/14 ........................................... 537,877 338,689
10.125%, 5/15/27 ......................................... 600,000 448,500
----------
2,448,439
----------
JAMAICA 5.7%
Government of Jamaica, Reg S, 9.625%, 7/02/02 .............. 1,075,000 1,010,500
----------
MEXICO 22.4%
Bepensa SA, 144A, 9.75%, 9/30/04 ........................... 230,000 194,350
Cemex SA, 144A, 10.75%, 7/15/00 ............................ 65,000 66,747
Petroleos Mexicanos, 144A, 9.375%, 12/02/08 ................ 250,000 254,688
Protexa Construcciones SA de CV, 144A, 12.125%, 7/24/02 .... 70,000 50,400
United Mexican States:
9.75%, 2/06/01 ........................................... 400,000 415,200
8.625%, 3/12/08 .......................................... 540,000 503,955
11.375%, 9/15/16 ......................................... 1,560,000 1,656,330
A, 6.25%, 12/31/19 ....................................... 490,000 361,069
11.50%, 5/15/26 .......................................... 450,000 496,350
----------
3,999,089
----------
PANAMA .2%
Republic of Panama, FRN, 6.084%, 5/10/02 ................... 36,924 35,816
----------
PERU 1.9%
Republic of Peru, FRN, 4.50%, 3/07/17 ...................... 550,000 340,313
----------
TRINIDAD AND TOBAGO .2%
SEI Holdings IX Inc., 144A, 11.00%, 11/30/00 ............... 30,000 30,000
----------
UNITED STATES 27.4%
U.S. Treasury Bond:
5.25%, 11/15/28 .......................................... 2,100,000 1,821,095
</TABLE>
4
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- -----------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
UNITED STATES (CONT.)
U.S. Treasury Notes:
<S> <C> <C>
5.375%, 7/31/00 ............................. 1,800,000 $ 1,800,563
6.25%, 4/30/01 .............................. 325,000 328,149
6.375%, 8/15/02 ............................. 210,000 213,478
6.125%, 8/15/07 ............................. 723,000 724,130
-----------
4,887,415
-----------
VENEZUELA 10.0%
Republic of Venezuela:
Reg S, 9.125%, 6/18/07 ...................... 400,000 290,000
FRN, 6.313%, 12/18/07 ....................... 202,380 154,062
9.25%, 9/15/27 .............................. 2,025,000 1,339,030
-----------
1,783,092
-----------
TOTAL LONG TERM SECURITIES (COST $18,929,351) . 17,233,962
-----------
SHORT TERM INVESTMENT (COST $320,000) 1.8%
Deutsche Bank AG, 5.50%, 10/01/99, Time Deposit 320,000 320,000
-----------
TOTAL INVESTMENTS (COST $19,249,351) 98.5% .... 17,553,962
OTHER ASSETS, LESS LIABILITIES 1.5% ........... 261,084
-----------
TOTAL NET ASSETS 100.0% ....................... $17,815,046
===========
</TABLE>
CURRENCY ABBREVIATION:
ARS - Argentine Peso
*Securities denominated in U.S. dollars unless otherwise indicated.
See notes to financial statements. 5
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
Assets:
<S> <C>
Investments in securities, at value (cost $19,249,351) .............. $ 17,553,962
Cash ................................................................ 405
Receivables:
Fund shares sold .................................................. 3,976
Interest .......................................................... 387,660
Other assets ........................................................ 6,038
------------
Total assets ................................................... 17,952,041
------------
Liabilities:
Payables:
Fund shares redeemed .............................................. 101,615
To affiliates ..................................................... 15,473
Accrued expenses .................................................... 19,907
------------
Total liabilities .............................................. 136,995
------------
Net assets, at value ................................................. $ 17,815,046
============
Net assets consist of:
Undistributed net investment income ................................. $ 143,634
Net unrealized depreciation ......................................... (1,695,389)
Accumulated net realized loss ....................................... (522,203)
Beneficial shares ................................................... 19,889,004
------------
Net assets, at value ................................................. $ 17,815,046
============
Net asset value per share ($17,815,046 / 1,881,867 shares outstanding) $ 9.47
============
Maximum offering price per share ($9.47 / 95.75%) .................... $ 9.89
============
</TABLE>
6 See notes to financial statements.
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Statements (continued)
Statement of Operations
for the six months ended September 30, 1999 (unaudited)
<TABLE>
<S> <C> <C>
Interest Income .................................... $ 982,765
---------
Expenses:
Management fees (Note 3) .......................... $ 59,788
Administrative fees (Note 3) ...................... 14,947
Distribution fees (Note 3) ........................ 34,922
Transfer agent fees (Note 3) ...................... 19,600
Custodian fees .................................... 3,300
Reports to shareholders ........................... 4,700
Registration and filing fees ...................... 7,300
Professional fees ................................. 11,500
Trustees' fees and expenses ....................... 1,800
Amortization of organization costs ................ 4,170
Other ............................................. 8,939
---------
Total expenses ................................... 170,966
Expenses waived/paid by affiliate (Note 3) ....... (46,714)
---------
Net expenses ..................................... 124,252
---------
Net investment income ........................... 858,513
---------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ...................................... (401,910)
Foreign currency transactions .................... 23
---------
Net realized loss ................................ (401,887)
Net unrealized appreciation on investments ....... 33,415
---------
Net realized and unrealized loss ................... (368,472)
---------
Net increase in net assets resulting from operations $ 490,041
=========
</TABLE>
See notes to financial statements. 7
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Statements (continued)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
----------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................................................... $ 858,513 $ 1,692,548
Net realized loss from investments and foreign currency transactions .... (401,887) (44,042)
Net unrealized appreciation (depreciation) on investments ............... 33,415 (2,007,155)
----------------------------------
Net increase (decrease) in net assets resulting from operations ....... 490,041 (358,649)
Distributions to shareholders from:
Net investment income ................................................... (744,524) (1,681,932)
Net realized gains ...................................................... -- (119,661)
Fund share transactions (Note 2): ......................................... (4,199,399) 9,456,029
----------------------------------
Net increase (decrease) in net assets ................................. (4,453,882) 7,295,787
Net assets:
Beginning of period ....................................................... 22,268,928 14,973,141
----------------------------------
End of period ............................................................. $17,815,046 $22,268,928
==================================
Undistributed net investment income included in net assets:
End of period ............................................................. $ 143,634 $ 29,645
==================================
</TABLE>
8 See notes to financial statements.
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Americas Government Securities Fund (the Fund) is a separate,
non-diversified series of Templeton Global Investment Trust (the Trust), which
is an open-end management company registered under the Investment Company Act of
1940. The Fund seeks a high level of current income, with total return as a
secondary goal by investing, under normal market conditions, at least 65% of its
total net assets in debt securities issued or guaranteed by Government Entities
of Western Hemisphere countries (located in North, South, or Central America and
the surrounding waters). 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. 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.
Distributions to shareholders are recorded on the ex-dividend date.
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.
9
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. 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
At September 30, 1999, there were 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, 1999 MARCH 31, 1999
-----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 172,718 $ 1,678,986 1,734,521 $17,294,112
Shares issued on reinvestment of distributions ... 56,602 541,121 149,473 1,452,139
Shares redeemed .................................. (667,223) (6,419,506) (966,650) (9,290,222)
-----------------------------------------------------------
Net increase (decrease) .......................... (437,903) $(4,199,399) 917,344 $ 9,456,029
===========================================================
</TABLE>
Templeton Global Investors, Inc., an affiliate of the Fund, is the record owner
of 300,333 shares as of September 30, 1999.
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 0.60% 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>
TICI and FT Services agreed in advance to reduce fees to the extent necessary to
limit total expenses to an annual rate of 1.25% of the Fund's average daily net
assets through July 31, 2000, as reflected in the Statement of Operations.
10
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (cont.)
The Fund reimburses Distributors up to 0.35% per year of its average daily net
assets for costs incurred in marketing the Fund's shares. Under the distribution
plan, costs exceeding the maximum may be reimbursed in subsequent periods. At
September 30, 1999, unreimbursed costs were $83,695.
4. 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.
The cost of securities for income tax purposes is the same as that shown in the
Statement of Investments. At September 30, 1999, the net unrealized depreciation
based on the cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 158,790
Unrealized depreciation (1,854,179)
-----------
Net unrealized depreciation $(1,695,389)
===========
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1999 aggregated $198,140 and $5,006,212,
respectively.
6. FUND MERGER
The Fund's Board of Trustees and shareholders approved a proposal to merge the
Fund into Templeton Global Bond Fund. The effective date of the merger was
October 21, 1999.
In anticipation of the Fund merger, the Fund paid a dividend of $0.1328 (13
cents) per share on October 20, 1999 to shareholders of record on October 19,
1999.
11
<PAGE>
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Change in Independent Auditor
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent fiscal years
and through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report.
12
