SEMI
ANNUAL REPORT
SEPTEMBER 30, 2000
TEMPLETON
INTERNATIONAL FUND
[TEMPLETON LOGO]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
PAGE
[Photo of Mark G.Holowesko, CFA]
Mark G. Holowesko, CFA
President
Templeton Global Investment Trust
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.
We're on the Web--
Now you can access online information about your fund, including this
shareholder report. Find our Web site at franklintempleton.com, your online
resource for fund literature, prices and performance, investor information and
around-the-clock account services.
PAGE
SHAREHOLDER LETTER
Your Fund's Goal: Templeton International Fund seeks long-term capital
appreciation. Under normal market conditions, the Fund will invest at least 75%
of its total assets in the equity securities of companies located in any
developed country outside the United States.
Dear Shareholder:
This semiannual report of Templeton International Fund covers the six months
ended September 30, 2000 -- a challenging time for international equity markets.
Fostered by increased employment, generally subdued inflation, rising trade
levels and higher commodity prices, economies of many nations produced strong
gains. In Europe, annualized gross domestic product (GDP) increases occurred in
the United Kingdom, Germany, France, the Netherlands and Sweden. In Asia, the
Hong Kong economy continued to surprise, surging 14.3% in the first quarter and
10.8% in the second quarter in terms of annualized GDP.(1)
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter ..... 1
Performance Summary .... 8
Financial Highlights &
Statement of Investments 10
Financial Statements ... 18
Notes to Financial
Statements ............. 21
</TABLE>
1. Source: Census & Statistics Dept. of Hong Kong SAR.
The dollar value, number of shares or principal value, and complete legal titles
of all portfolio holdings are listed in the Fund's Statement of Investments
(SOI). The SOI begins on page 13.
[FUND CATEGORY PYRAMID GRAPHIC]
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
9/30/00
[PIE CHART GRAPHIC]
<TABLE>
<CAPTION>
<S> <C>
Europe 69.2%
Asia 17.3%
North America 5.0%
Australia & New Zealand 4.9%
Short-Term Investments & Other
Net Assets 3.6%
</TABLE>
And Japan's central bank raised interest rates for the first time in a decade --
a symbolic move to emphasize the country's emergence from a long deflationary
period. Australia continued to deliver strong economic growth, having recorded
12 consecutive quarters of annualized GDP growth above 4%.(2)
Despite the generally favorable economic news, global stock markets grew quite
volatile during the spring and summer, with foreign value stocks providing
disappointing returns overall. And the growth stock segment of the market, led
by telecommunications, technology and media companies, suffered significant
corrections. The fallout from these declines created a ripple effect throughout
the world, causing many investors to be cautious about extraordinarily high
price-to-earnings ratios followed by a string of corporate earnings warnings
released by some of the major participants within the "new economy." The
strength of the U.S. dollar relative to most foreign currencies also contributed
to weakness in foreign stocks. This effect was exacerbated by the protracted
depreciation of the euro, which traded at all-time lows during the reporting
period and was about 25% cheaper in September 2000 than when it was introduced
in January 1999. The British pound also slumped and traded close to 14-year
lows. Although weakness in the euro and British pound negatively impacted
Europe's equity markets, it also contributed to a surge in European exports.
2. Source: Australia Bureau of Statistics. GDP figures are through June 30,
2000.
2
PAGE
Within this environment, Templeton International Fund - Class A posted a
six-month cumulative total return of -2.48% as shown in the Performance Summary
on page 8. The Fund's benchmarks, the Morgan Stanley Capital International
(MSCI) Europe Index, and the MSCI Europe, Australasia, Far East Index (MSCI
EAFE) returned -10.12% and -11.60%, respectively, during the same time.(3)
We believe our disciplined, value-oriented, bottom-up approach to investing was
the key factor responsible for the performance of the Fund relative to its
benchmark indexes. In March, many global equity markets appeared to be
experiencing a migration into value stocks. Early catalysts for this rotation
came as profit warnings were issued by leading telecom companies Nokia and
Ericsson, which we believe cast an overdue measure of doubt upon unrealistic
expectations that had been included in some telecommunications and technology
stock valuations worldwide. There was also a shift in investor sentiment toward
the slowing U.S. economy, which diverted global attention away from the
speculative end of the market to more defensive, "old economy" sectors and
companies that traded with what we believed to be undemanding valuations. On
average, the Fund's holdings traded on price-to-earnings multiples that were
approximately half of those of the MSCI EAFE Index, and benefited from what
could prove to be the market's return to favor for fundamental analysis and
value.(4)
TOP 10 COUNTRIES*
9/30/00
<TABLE>
<CAPTION>
% OF TOTAL
NET ASSETS
-------------------------------
<S> <C>
United Kingdom 25.3%
Japan 10.7%
Germany 9.1%
France 7.3%
Netherlands 6.5%
Sweden 6.2%
Spain 6.2%
Hong Kong 5.4%
Australia 4.0%
Canada 3.8%
</TABLE>
* Does not include investments in fixed income securities, short-term
investments or other net assets.
3. Source: Standard & Poor's Micropal.
The unmanaged MSCI Europe Index tracks approximately 600 companies
representing 13 European countries. The average company within the index has
a market capitalization of about US$2 billion.
The unmanaged MSCI EAFE Index tracks the performance of approximately
1,000 securities in 20 countries and includes reinvested dividends.
Indexes are unmanaged and include reinvested dividends. One cannot
invest directly in an index, nor is an index representative of the
Fund's portfolio.
4. Source: FactSet Research Systems, Inc.
3
PAGE
TOP 10 SECTORS*
9/30/00
<TABLE>
<CAPTION>
% OF TOTAL
NET ASSETS
-----------------------------------------
<S> <C>
Banks 10.1%
Electric Utilities 9.0%
Chemicals 7.1%
Oil & Gas 6.2%
Auto Components 4.8%
Machinery 4.7%
Insurance 4.5%
Building Products 3.9%
Electronic Equipment
& Instruments 3.6%
Diversified Financials 3.5%
</TABLE>
* Does not include investments in fixed income securities, short-term
investments or other net assets.
In terms of our European holdings, representing 69.2% of total net assets on
September 30, 2000, we took advantage of higher oil prices to reduce some of our
European energy positions because we did not think oil prices during the review
period would remain sustainable over the longer term. We expect demand to wane
based on growing evidence of a slowing U.S. economy, while on the supply side,
oil companies are starting to spend their recently supernormal profits on
capital expenditure investments. We realized gains in some of our
telecommunications and telecommunication equipment holdings, and both Alcatel
(France) and Marconi PLC (UK) were sold at a profit. These sales were based on
our assessment that their equity valuations did not reflect higher product and
licensing costs for telecom providers in general, a fact that we believe could
eventually stifle ambitious plans for telecom equipment spending.
In Asia, our Japanese equities (10.7% of total net assets), like the country's
overall equity market, performed poorly due to several reasons. First, there was
the global rotation by foreign investors out of telecom and technology companies
for the reasons cited above. Second, there was the high-profile bankruptcy of a
Japanese retailer that refocused attention upon Japan's historical problems with
over-leveraged companies and poor banking practices. And third, investors seem
to be concerned that interest rates are rising too soon, possibly snuffing out
any signs of economic recovery the same way tax increases did in 1997. The
long-term potential for a Japanese economic and corporate profit recovery
remains, however, so our
4
PAGE
team of analysts is diligently trying to identify the companies that are
committed to restructuring, have strong balance sheets, and trading with what we
believe are reasonable valuations. Adhering to this strategy, we acquired shares
of Fujitsu (computers & peripherals) and added to our holdings of Fuji Photo
Film (leisure equipment & products) and Nomura Securities (financial services)
during the reporting period.
Australian and New Zealand stocks comprised 4.9% of the Fund's total net assets
on September 30, 2000. Within the region, we continued to buy Australian banking
stocks, believing the market was over-discounting the adverse impact of higher
interest rates on financial services companies. As interest rates leveled off
during the six months under review, the Fund's Australian bank holdings
performed well in local currency terms but were held back in U.S.-dollar terms
due to weakness in the Australian dollar.
Looking forward, we are optimistic about long-term international investment
opportunities. We believe that if European trade levels rise, structural reforms
relating to the region's restrictive labor markets boost productivity, and
onerous corporate tax rates are reduced, European economic growth may be
propelled beyond recent consensus expectations. Additionally, during third
quarter 2000, Germany, France and Italy each committed to reducing corporate tax
levels. These structural and governmental reforms, combined with a current wave
of corporate restructuring, remain core themes for our European holdings. Within
Asia, our estimates for continued strong
TOP 10 EQUITY HOLDINGS
9/30/00
<TABLE>
<CAPTION>
COMPANY, % OF TOTAL
SECTOR, COUNTRY NET ASSETS
<S> <C>
Hitachi Ltd., 2.5%
Electronic Equipment &
Instruments, Japan
E.ON AG, 2.2%
Electric Utilities, Germany
Fuji Photo Film Co. Ltd., 2.2%
Leisure Equipment &
Products, Japan
Iberdrola SA, Br., 2.2%
Electric Utilities, Spain
HSBC Holdings PLC, 1.9%
Banks, Hong Kong
Nomura Securities Co. Ltd., 1.9%
Diversified Financials,
Japan
Regie Nationale des Usines
Renault SA, 1.9%
Automobiles, France
UPM-Kymmene Corp., 1.9%
Paper & Forest Products,
Finland
Allied Zurich PLC, 1.9%
Insurance, United Kingdom
Akzo Nobel NV, 1.8%
Chemicals, Netherlands
</TABLE>
5
PAGE
economic growth in Hong Kong through the end of 2000 provide a favorable
background to our holdings in Hong Kong banks, property developers and
electricity generators.
At Templeton International Fund, we will continue to apply our strict value
approach to finding attractively priced securities around the world. We will
also maintain our time-tested strategy of diversification, which allows us to
spread risk over a large number of countries and industries and helps us to
expand the areas for discovering undervalued assets.
Of course, there are special risks involved with global investing related to
market, currency, economic, social, political and other factors. Investing in
certain foreign markets means accepting a certain amount of volatility, and, in
some cases, the consequences of severe market corrections. For example, Hong
Kong's equity market has appreciated 933.3% in the past 15 years, but has
suffered five quarterly declines of more than 20% during the same time.(5) While
short-term volatility can be disconcerting, declines in excess of 50% are not
unusual in some markets. These risks and considerations are discussed in the
Fund's prospectus.
5. Source: Hong Kong Hang Seng Index. Based on quarterly percentage price change
over 15 years ended September 30, 2000. Market return is measured in U.S.
dollars and does not include reinvested dividends. The Hang Seng Index is a
capitalization-weighted index of 33 companies that represent approximately 70%
of the total market capitalization of the Stock Exchange of Hong Kong. The
components of the Index are divided into four subindexes: Commerce and Industry,
Finance, Utilities and Properties.
6
PAGE
Thank you for investing in Templeton International Fund. We welcome your
comments and look forward to serving you in the future.
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 International Fund
This discussion reflects our views, opinions and portfolio holdings as of
September 30, 2000, the end of the reporting period. The information provided is
not a complete analysis of every aspect of any country, industry, security or
the Fund. Our strategies and the Fund's portfolio composition will change
depending on market and economic conditions. Although historical performance is
no guarantee of future results, these insights may help you understand our
investment and management philosophy.
7
PAGE
PERFORMANCE SUMMARY AS OF 9/30/00
Six-month total return represents the change in value of an investment for the
period indicated and does not include sales charges. 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 operating expenses for
each class. Past distributions are not indicative of future trends. All total
returns include reinvested distributions at net asset value.
CLASS A: Subject to the current, maximum 5.75% initial sales charge.*
CLASS C: Subject to 1% initial sales charge and 1% contingent deferred sales
charge for shares redeemed within 18 months of investment. These shares have
higher annual fees and expenses than Class A shares.*
ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees and are available to a
limited class of investors.*
* Past expense reductions by the Fund's manager increased the Fund's
total returns.
<TABLE>
<CAPTION>
<S> <C> <C>
CLASS A
----------------------------------------------------------------------------
Six-Month Total Return -2.48%
Net Asset Value (NAV) $11.90 (9/30/00) $12.91 (3/31/00)
Change in NAV -$1.01
Distributions
(4/1/00-9/30/00) Dividend Income $0.0378
Short-Term Capital Gain $0.6138
Long-Term Capital Gain $0.0383
-------------------------------------
Total $0.6899
CLASS C
----------------------------------------------------------------------------
Six-Month Total Return -2.83%
Net Asset Value (NAV) $11.75 (9/30/00) $12.78 (3/31/00)
Change in NAV -$1.03
Distributions
(4/1/00-9/30/00) Dividend Income $0.0184
Short-Term Capital Gain $0.6138
Long-Term Capital Gain $0.0383
-------------------------------------
Total $0.6705
ADVISOR CLASS
----------------------------------------------------------------------------
Six-Month Total Return -2.28%
Net Asset Value (NAV) $11.95 (9/30/00) $12.95 (3/31/00)
Change in NAV -$1.00
Distributions
(4/1/00-9/30/00) Dividend Income $0.0518
Short-Term Capital Gain $0.6138
Long-Term Capital Gain $0.0383
-------------------------------------
Total $0.7039
</TABLE>
Past performance does not guarantee future results.
8
PAGE
ADDITIONAL PERFORMANCE
AS OF 9/30/00
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (5/8/95)
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) - 4.31% 62.95% 60.99%
Average Annual Total Return(2) - 9.79% 8.97% 8.03%
Value of $10,000 Investment(3) $ 9,021 $ 15,362 $ 15,174
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 5-YEAR (5/8/95)
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) - 4.92% 57.64% 55.43%
Average Annual Total Return(2) - 6.71% 9.31% 8.31%
Value of $10,000 Investment(3) $ 9,329 $ 15,605 $ 15,389
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
ADVISOR CLASS(4) 1-YEAR 5-YEAR (5/8/95)
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) - 4.04% 67.02% 65.01%
Average Annual Total Return(2) - 4.04% 10.80% 9.72%
Value of $10,000 Investment(3) $ 9,596 $ 16,702 $ 16,501
</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 current, applicable,
maximum sales charge(s) for that class.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the current, applicable, maximum
sales charge(s) for that class.
4. Effective 1/2/97, the Fund began offering Advisor Class shares, which do not
have sales charges nor Rule 12b-1 plans. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 1/2/97, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge and including the effect of the
Class A Rule 12b-1 fees; and (b) for periods after 1/1/97, an actual Advisor
Class figure is used reflecting a deduction of all charges and fees applicable
to that class. Since 1/2/97 (commencement of sales), the cumulative and average
annual total returns of Advisor Class shares were 37.99% and 8.97%.
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. You may
have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" at
franklintempleton.com, or call Franklin Templeton Investments at 1-800/342-5236.
Past performance does not guarantee future results.
9
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996+
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the
period)
Net asset value, beginning of period..... $12.91 $12.61 $14.26 $12.35 $10.39 $10.00
------------------------------------------------------------------------------
Income from investment operations:
Net investment income................... .18 .27 .21 .23 .14 .08
Net realized and unrealized gains
(losses).............................. (.50) .94 (1.24) 2.99 2.09 .31
------------------------------------------------------------------------------
Total from investment operations......... (.32) 1.21 (1.03) 3.22 2.23 .39
------------------------------------------------------------------------------
Less distributions from:
Net investment income................... (.04) (.29) (.22) (.23) (.13) --
Net realized gains...................... (.65) (.62) (.40) (1.08) (.14) --
------------------------------------------------------------------------------
Total distributions...................... (.69) (.91) (.62) (1.31) (.27) --
------------------------------------------------------------------------------
Net asset value, end of the period....... $11.90 $12.91 $12.61 $14.26 $12.35 $10.39
==============================================================================
Total Return*............................ (2.48)% 9.61% (7.12)% 28.25% 21.70% 3.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........ $32,678 $40,201 $39,509 $19,455 $9,268 $4,308
Ratios to average net assets:
Expenses................................ 1.74%** 1.86% 1.73% 1.85% 1.85% 1.85%**
Expenses, excluding waiver and payments
by affiliate.......................... 1.74%** 1.86% 1.73% 2.41% 2.63% 3.56%**
Net investment income................... 2.82%** 2.03% 1.91% 2.04% 1.72% 1.39%**
Portfolio turnover rate.................. 23.78% 61.73% 38.57% 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.
++Based on average weighted shares outstanding effective year ended March 31,
2000.
10
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 2000 ----------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996+
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the
period)
Net asset value, beginning of period..... $12.78 $12.49 $14.16 $12.27 $10.32 $10.00
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income................... .14 .18 .11 .12 .11 .07
Net realized and unrealized gains
(losses).............................. (.50) .95 (1.22) 3.01 2.02 .25
--------------------------------------------------------------------------------
Total from investment operations......... (.36) 1.13 (1.11) 3.13 2.13 .32
--------------------------------------------------------------------------------
Less distributions from:
Net investment income................... (.02) (.22) (.16) (.16) (.04) --
Net realized gains...................... (.65) (.62) (.40) (1.08) (.14) --
--------------------------------------------------------------------------------
Total distributions...................... (.67) (.84) (.56) (1.24) (.18) --
--------------------------------------------------------------------------------
Net asset value, end of period........... $11.75 $12.78 $12.49 $14.16 $12.27 $10.32
================================================================================
Total Return*............................ (2.83)% 8.99% (7.73)% 27.55% 20.83% 3.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........ $12,997 $14,051 $14,222 $5,929 $2,424 $1,431
Ratios to average net assets:
Expenses................................ 2.38%** 2.49% 2.37% 2.50% 2.50% 2.50%**
Expenses, excluding waiver and payments
by affiliate.......................... 2.38%** 2.49% 2.37% 3.05% 3.29% 4.21%**
Net investment income................... 2.29%** 1.34% 1.26% 1.31% 1.45% 1.06%**
Portfolio turnover rate.................. 23.78% 61.73% 38.57% 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 effective year ended March 31,
2000.
11
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
--------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 2000 ----------------------------------------------
(UNAUDITED) 2000 1999 1998 1997+
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the
period)
Net asset value, beginning of period.......... $12.95 $12.66 $14.30 $12.36 $11.56
--------------------------------------------------------------------
Income from investment operations:
Net investment income........................ .24 .26 .74 .56 .07
Net realized and unrealized gains (losses)... (.54) 1.00 (1.73) 2.73 .73
--------------------------------------------------------------------
Total from investment operations.............. (.30) 1.26 (.99) 3.29 .80
--------------------------------------------------------------------
Less distributions from:
Net investment income........................ (.05) (.35) (.25) (.27) --
Net realized gains........................... (.65) (.62) (.40) (1.08) --
--------------------------------------------------------------------
Total distributions (.70) (.97) (.65) (1.35) --
--------------------------------------------------------------------
Net asset value, end of the period............ $11.95 $12.95 $12.66 $14.30 $12.36
====================================================================
Total Return*................................. (2.28)% 9.90% (6.76)% 28.88% 6.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)............. $315 $544 $265 $83 $36
Ratios to average net assets:
Expenses..................................... 1.39%** 1.51% 1.38% 1.50% 1.50%**
Expenses, excluding waiver and payments by
affiliate.................................. 1.39%** 1.51% 1.38% 2.06% 1.90%**
Net investment income........................ 3.88%** 1.93% 2.49% 2.38% 2.56%**
Portfolio turnover rate....................... 23.78% 61.73% 38.57% 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 effective year ended March 31,
2000.
See Notes to Financial Statements.
12
PAGE
TEMPLETON INTERNATIONAL FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 94.7%
AEROSPACE & DEFENSE 3.3%
BAE Systems PLC............................................. United Kingdom 97,213 $ 523,176
Rolls-Royce PLC............................................. United Kingdom 205,089 514,724
Saab AB, B.................................................. Sweden 58,700 466,163
-----------
1,504,063
-----------
AIRLINES 1.4%
British Airways PLC......................................... United Kingdom 13,813 59,072
Singapore Airlines Ltd. .................................... Singapore 62,500 592,570
-----------
651,642
-----------
AUTO COMPONENTS 3.1%
Laird Group PLC............................................. United Kingdom 186,500 663,156
Michelin SA, B.............................................. France 27,002 750,578
-----------
1,413,734
-----------
AUTOMOBILES 3.4%
Bayerische Motorenwerke AG.................................. Germany 20,400 702,076
Regie Nationale des Usines Renault SA....................... France 20,000 857,740
-----------
1,559,816
-----------
BANKS 10.1%
Australia & New Zealand Banking Group Ltd. ................. Australia 100,000 719,179
Banco Popular Espanol SA.................................... Spain 16,946 519,651
Bank Austria AG............................................. Austria 1,300 70,609
Deutsche Bank AG............................................ Germany 5,000 418,281
Foreningssparbanken AB, A................................... Sweden 30,000 426,658
HSBC Holdings PLC........................................... Hong Kong 63,000 880,740
National Australia Bank Ltd. ............................... Australia 52,519 725,462
St. George Bank Ltd. ....................................... Australia 16,500 100,016
Union Bank of Norway........................................ Norway 20,000 485,771
Westpac Banking Corp. Ltd. ................................. Australia 40,000 276,191
-----------
4,622,558
-----------
BUILDING PRODUCTS 3.9%
Anglian Group PLC........................................... United Kingdom 70,400 153,528
Caradon PLC................................................. United Kingdom 261,800 683,182
Hepworth PLC................................................ United Kingdom 38,500 116,122
Heywood Williams Group PLC.................................. United Kingdom 175,700 461,097
Pilkington PLC.............................................. United Kingdom 320,198 388,199
-----------
1,802,128
-----------
</TABLE>
13
PAGE
TEMPLETON INTERNATIONAL FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
CHEMICALS 7.1%
Agrium Inc. ................................................ Canada 30,000 $ 307,500
Akzo Nobel NV............................................... Netherlands 20,000 843,621
BASF AG..................................................... Germany 23,000 816,927
DSM NV, Br. ................................................ Netherlands 25,192 728,276
Imperial Chemical Industries PLC............................ United Kingdom 57,600 327,660
Kemira OY................................................... Finland 50,000 261,205
-----------
3,285,189
-----------
COMPUTERS & PERIPHERALS 1.8%
Fujitsu Ltd. ............................................... Japan 35,000 812,974
-----------
CONSTRUCTION MATERIALS .4%
Cheung Kong Infrastructure Holdings Ltd. ................... Hong Kong 100,000 164,169
-----------
CONTAINERS & PACKAGING .2%
Assidoman AB................................................ Sweden 4,800 75,241
Assidoman AB, 144A.......................................... Sweden 1,440 22,572
-----------
97,813
-----------
DISTRIBUTORS .3%
Inchcape PLC................................................ United Kingdom 33,150 132,333
-----------
DIVERSIFIED FINANCIALS 3.5%
ING Groep NV................................................ Netherlands 11,000 732,680
Nomura Securities Co. Ltd. ................................. Japan 40,000 869,887
-----------
1,602,567
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.8%
Nippon Telegraph & Telephone Corp. ......................... Japan 84 823,987
Telecom Corp. of New Zealand Ltd. .......................... New Zealand 182,100 453,026
-----------
1,277,013
-----------
ELECTRIC UTILITIES 9.0%
CLP Holdings Ltd. .......................................... Hong Kong 80,000 359,119
E.ON AG..................................................... Germany 20,000 1,033,348
Endesa SA................................................... Spain 30,725 577,512
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 147,400 455,612
Iberdrola SA, Br. .......................................... Spain 78,200 993,708
International Power PLC..................................... United Kingdom 40,000 276,184
Powergen PLC................................................ United Kingdom 60,000 456,414
-----------
4,151,897
-----------
ELECTRICAL EQUIPMENT .2%
ABB Ltd. ................................................... Switzerland 1,097 107,274
-----------
</TABLE>
14
PAGE
TEMPLETON INTERNATIONAL FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
ELECTRONIC EQUIPMENT & INSTRUMENTS 3.6%
Hitachi Ltd. ............................................... Japan 100,000 $ 1,160,466
Kardex AG, Br. ............................................. Switzerland 1,200 505,439
-----------
1,665,905
-----------
FOOD & DRUG RETAILING 1.8%
Safeway PLC................................................. United Kingdom 190,000 808,334
-----------
FOOD PRODUCTS 2.0%
Kikkoman Corp. ............................................. Japan 6,000 43,087
Northern Foods PLC.......................................... United Kingdom 71,019 110,777
Unilever PLC................................................ United Kingdom 115,950 750,445
-----------
904,309
-----------
GAS UTILITIES 1.5%
TransCanada PipeLines Ltd. ................................. Canada 75,372 708,835
-----------
HOUSEHOLD DURABLES 1.1%
Koninklijke Philips Electronics NV.......................... Netherlands 1,375 59,176
Mckechnie Group PLC......................................... United Kingdom 78,400 457,283
-----------
516,459
-----------
INDUSTRIAL CONGLOMERATES 2.4%
*Bullough PLC............................................... United Kingdom 384,800 315,755
Cookson Group PLC........................................... United Kingdom 172,638 483,691
Norsk Hydro ASA............................................. Norway 7,641 319,836
-----------
1,119,282
-----------
INSURANCE 4.5%
Allied Zurich PLC........................................... United Kingdom 75,000 851,617
AXA SA...................................................... France 2,500 326,506
Scor........................................................ France 8,820 385,268
XL Capital Ltd., A.......................................... Bermuda 7,000 514,500
-----------
2,077,891
-----------
LEISURE EQUIPMENT & PRODUCTS 2.2%
Fuji Photo Film Co. Ltd. ................................... Japan 30,000 1,004,997
-----------
MACHINERY 4.7%
METSO OYJ................................................... Finland 50,289 510,341
Sandvik AB.................................................. Sweden 41,100 825,584
VA Technologie AG, Br. ..................................... Austria 4,900 246,468
Volvo AB, B................................................. Sweden 36,142 583,420
-----------
2,165,813
-----------
</TABLE>
15
PAGE
TEMPLETON INTERNATIONAL FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
MARINE 1.0%
*Koninklijke Nedlloyd Groep NV.............................. Netherlands 6,250 $ 122,440
Peninsular & Oriental Steam Navigation Co. ................. United Kingdom 40,300 353,927
-----------
476,367
-----------
METALS & MINING 1.3%
Barrick Gold Corp. ......................................... Canada 40,000 608,800
-----------
MULTILINE RETAIL 1.8%
House of Fraser PLC......................................... United Kingdom 231,400 168,497
Marks & Spencer PLC......................................... United Kingdom 200,000 609,882
*Mothercare PLC............................................. United Kingdom 16,719 32,134
-----------
810,513
-----------
OIL & GAS 6.2%
Eni SpA..................................................... Italy 105,000 556,869
*Husky Energy Inc. ......................................... Canada 15,141 140,381
Repsol YPF SA............................................... Spain 40,000 735,962
Shell Transport & Trading Co. PLC........................... United Kingdom 79,000 645,329
Total Fina Elf SA, B........................................ France 5,360 784,222
-----------
2,862,763
-----------
PAPER & FOREST PRODUCTS 3.0%
Holmen Aktiebolag AB, B..................................... Sweden 15,081 352,250
Stora Enso OYJ, R........................................... Finland 12,200 102,168
Svenska Cellulosa AB, B..................................... Sweden 4,500 79,415
UPM-Kymmene Corp. .......................................... Finland 33,500 856,412
-----------
1,390,245
-----------
PHARMACEUTICALS .5%
Aventis SA.................................................. France 3,070 230,275
-----------
REAL ESTATE 2.4%
Cheung Kong Holdings Ltd. .................................. Hong Kong 50,000 604,411
Wereldhave NV............................................... Netherlands 10,920 487,599
-----------
1,092,010
-----------
ROAD & RAIL .4%
Seino Transportation Co. Ltd. .............................. Japan 41,000 204,886
-----------
SPECIALTY RETAIL 1.5%
Lex Service PLC............................................. United Kingdom 59,700 341,150
W.H. Smith PLC.............................................. United Kingdom 76,954 362,948
-----------
704,098
-----------
TEXTILES & APPAREL 1.0%
Adidas-Salomon AG........................................... Germany 8,000 439,813
-----------
</TABLE>
16
PAGE
TEMPLETON INTERNATIONAL FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TRANSPORTATION INFRASTRUCTURE .6%
BAA PLC..................................................... United Kingdom 33,256 $ 262,318
-----------
WATER UTILITIES .7%
Thames Water Group PLC...................................... United Kingdom 17,669 317,142
-----------
TOTAL COMMON STOCKS (COST $49,555,461)...................... 43,556,225
-----------
PREFERRED STOCKS 1.7%
BBS Kraftfahrzeugtechnik AG, pfd. .......................... Germany 15,000 191,934
Volkswagen AG, pfd. ........................................ Germany 22,000 585,330
-----------
TOTAL PREFERRED STOCKS (COST $962,262)...................... 777,264
-----------
<CAPTION>
PRINCIPAL
AMOUNT**
----------
<S> <C> <C> <C>
BONDS (COST $13,181)
BAE Systems PLC, 7.45%, 11/29/03............................ United Kingdom 8,532GBP 12,425
-----------
SHORT TERM INVESTMENTS (COST $9,340,647) 20.3%
U.S. Treasury Bill, 6.03%, 12/28/00......................... United States 9,482,000 9,344,056
-----------
TOTAL INVESTMENTS (COST $59,871,551) 116.7%................. 53,689,970
OTHER ASSETS, LESS LIABILITIES (16.7%)...................... (7,699,877)
-----------
TOTAL NET ASSETS 100.0%..................................... $45,990,093
===========
CURRENCY ABBREVIATIONS:
GBP -- British Pounds
</TABLE>
*Non-income producing.
**Securities denominated in U.S. dollars unless otherwise indicated.
See Notes to Financial Statements.
17
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $59,871,551)..... $53,689,970
Cash....................................................... 5,971
Receivables:
Fund shares sold.......................................... 1,416,452
Dividends and interest.................................... 160,453
-----------
Total assets.......................................... 55,272,846
-----------
Liabilities:
Payables:
Fund shares redeemed...................................... 9,141,565
To affiliates............................................. 89,165
Accrued expenses........................................... 52,023
-----------
Total liabilities..................................... 9,282,753
-----------
Net assets, at value........................................ $45,990,093
===========
Net assets consist of:
Undistributed net investment income........................ $ 696,852
Net unrealized depreciation................................ (6,181,581)
Accumulated net realized gain.............................. 429,703
Beneficial shares.......................................... 51,045,119
-----------
Net assets, at value........................................ $45,990,093
===========
CLASS A:
Net asset value per share ($32,678,127 / 2,744,877 shares
outstanding)............................................. $11.90
===========
Maximum offering price per share ($11.90 / 94.25%)......... $12.63
===========
CLASS C:
Net asset value per share ($12,996,540 / 1,105,822 shares
outstanding)*............................................. $11.75
===========
Maximum offering price per share ($11.75 / 99.00%)......... $11.87
===========
ADVISOR CLASS:
Net asset value and maximum offering price per share
($315,426 / 26,399 shares outstanding).................... $11.95
===========
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
18
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $119,376)
Dividends.................................................. $1,039,047
Interest................................................... 202,807
----------
Total investment income............................... $ 1,241,854
Expenses:
Management fees (Note 3)................................... 202,678
Administrative fees (Note 3)............................... 40,530
Distribution fees (Note 3)
Class A................................................... 69,155
Class C................................................... 68,875
Transfer agent fees (Note 3)............................... 78,000
Custodian fees............................................. 8,000
Reports to shareholders.................................... 10,300
Registration and filing fees............................... 18,000
Professional fees.......................................... 10,150
Trustees' fees and expenses................................ 6,850
Other...................................................... 500
----------
Total expenses........................................ 513,038
-----------
Net investment income........................... 728,816
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 684,332
Foreign currency transactions............................. (47,293)
----------
Net realized gain..................................... 637,039
Net unrealized depreciation on investments............ (1,819,638)
-----------
Net realized and unrealized loss............................ (1,182,599)
-----------
Net decrease in net assets resulting from operations........ $ (453,783)
===========
</TABLE>
See Notes to Financial Statements.
19
PAGE
TEMPLETON INTERNATIONAL FUND
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 2000 YEAR ENDED
(UNAUDITED) MARCH 31, 2000
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 728,816 $ 1,072,923
Net realized gain from investments and foreign currency
transactions............................................. 637,039 2,653,529
Net unrealized appreciation (depreciation) on
investments.............................................. (1,819,638) 2,143,277
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (453,783) 5,869,729
Distributions to shareholders from:
Net investment income:
Class A.................................................. (97,334) (858,007)
Class C.................................................. (20,050) (250,511)
Advisor Class............................................ (2,263) (6,880)
Net realized gains:
Class A.................................................. (1,723,719) (1,865,259)
Class C.................................................. (710,573) (685,150)
Advisor Class............................................ (28,486) (9,109)
---------------------------------------
Total distributions to shareholders........................ (2,582,425) (3,674,916)
Beneficial share transactions (Note 2):
Class A.................................................. (5,595,019) (1,079,539)
Class C.................................................. 65,645 (601,482)
Advisor Class............................................ (240,549) 286,324
---------------------------------------
Total beneficial share transactions........................ (5,769,923) (1,394,697)
Net increase (decrease) in net assets................... (8,806,131) 800,116
Net assets:
Beginning of period........................................ 54,796,224 53,996,108
---------------------------------------
End of period.............................................. $45,990,093 $54,796,224
=======================================
Undistributed net investment income included in net assets:
End of period.............................................. $ 696,852 $ 87,683
=======================================
</TABLE>
See Notes to Financial Statements.
20
PAGE
TEMPLETON INTERNATIONAL FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton International 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 appreciation. Under normal market conditions, the Fund will
invest at least 75% of its total assets in the equity securities of companies
located in any developed country outside the United States. 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.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
21
PAGE
TEMPLETON INTERNATIONAL FUND
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
c. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS (CONT.)
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.
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
The Fund offers three classes of shares: Class A, Class C, 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, 2000, 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, 2000 MARCH 31, 2000
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold............................................ 31,764,718 $ 395,079,824 23,690,448 $ 314,457,916
Shares issued on reinvestment of distributions......... 140,014 1,666,183 186,757 2,460,911
Shares redeemed........................................ (32,273,533) (402,341,026) (23,895,532) (317,998,366)
-----------------------------------------------------------------
Net decrease........................................... (368,801) $ (5,595,019) (18,327) $ (1,079,539)
=================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold............................................ 265,317 $ 3,225,582 1,152,989 $ 15,374,364
Shares issued on reinvestment of distributions......... 53,629 631,740 61,755 806,278
Shares redeemed........................................ (312,895) (3,791,677) (1,253,428) (16,782,124)
-----------------------------------------------------------------
Net increase (decrease)................................ 6,051 $ 65,645 (38,684) $ (601,482)
=================================================================
</TABLE>
22
PAGE
TEMPLETON INTERNATIONAL FUND
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold............................................ 239,062 $ 2,931,724 39,471 $ 527,590
Shares issued on reinvestment of distributions......... 2,331 27,804 896 11,883
Shares redeemed........................................ (257,033) (3,200,077) (19,226) (253,149)
-----------------------------------------------------------------
Net increase (decrease)................................ (15,640) $ (240,549) 21,141 $ 286,324
=================================================================
</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>
The Fund reimburses Distributors up to 0.35% and 1.00% per year of the average
daily net assets of Class A and Class C shares, respectively, for costs incurred
in marketing the Fund's Class A and Class C shares. Under the Class A
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At September 30, 2000, the unreimbursed costs were $268,284.
Distributors received net commissions on sales of Fund shares and received
contingent deferred sales charges for the period of $10,079 and $32,362,
respectively.
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.
23
PAGE
TEMPLETON INTERNATIONAL FUND
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES (CONT.)
At September 30, 2000, the net unrealized depreciation based on the cost of
investments for income tax purposes of $60,077,651 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 2,490,370
Unrealized depreciation..................................... (8,878,051)
-----------
Net unrealized depreciation................................. $(6,387,681)
===========
</TABLE>
At March 31, 2000, the Fund has deferred currency losses occurring subsequent to
October 31, 1999 of $34,486. For tax purposes, such losses will be reflected in
the year ending March 31, 2001.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 2000 aggregated $11,142,436 and $12,199,497,
respectively.
24
PAGE
[TEMPLETON LOGO]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
Templeton International Fund
777 Mariners Island Blvd., P.O. Box 7777
San Mateo, CA 94403-7777
Presorted Standard
U.S. Postage
PAID
So. San Francisco, CA
Permit No. 655
SEMIANNUAL REPORT
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com
SHAREHOLDER SERVICES
1-800/632-2301
This report must be preceded or accompanied by the current Templeton
International Fund prospectus, 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. 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.
[Recycle Logo] Printed on recycled paper
419 S00 11/00
