Franklin Templeton Investment Funds SIMPLIFIED PROSPECTUS

" Franklin Templeton Investment Funds

SIMPLIFIED PROSPECTUS

Socie¤ te¤ d’investissementa' capital variableIncorporated in LuxembourgDecember, 2004

FRANKLIN TEMPLETON INVESTMENT FUNDSSocie¤te¤ d’investissement a' capital variable

Registered office : 26, boulevard Royal, L-2449 LuxembourgGrand Duchy of LuxembourgR.C.S. Luxembourg B 35 177

T his Simplified Prospectus contains selectedimportant information about FranklinTempleton Investment Funds (the

‘‘Company’’) to help you make informed decisionsabout investing in the Company. Additionalinformation about the Company is available in:

4 the full Prospectus;4 the most recent audited Annual and unaudited Semi-

Annual Reports of the Company.

These documents may be obtained free of cost from theCompany, its Administrative Agent and from alldistributors of the Shares of the Company.

These documents are incorporated by reference into thisSimplified Prospectus, which means that they legally formpart of this document, just as if they were printed as partof this document.

This Simplified Prospectus does not constitute an offer toanyone or solicitation by anyone in any jurisdiction inwhich such offer or solicitation is not lawful or in whichthe person making such offer or solicitation is not qualifiedto do so. The Shares of the Company may not be directlyor indirectly offered or sold in the United States ofAmerica or any of its territories or possessions or areassubject to its jurisdiction or to or for the benefit ofnationals or residents thereof, unless pursuant to anexemption from registration requirements available underthe US law, any applicable statute, rule or interpretation.

The Company is an open-ended investment companyorganised as a ‘‘socie¤te¤ anonyme’’ under the laws of theGrand Duchy of Luxembourg and is qualified as a ‘‘socie¤te¤d’investissement a' capital variable’’. The Company wasincorporated in Luxembourg on November 6, 1990, for anundetermined period. The Company is registered with theRegistre de Commerce et des Socie¤te¤s de et a' Luxembourg,under number B 35 177. Copies of the Articles ofIncorporation, as amended, are available for inspection atthe Registre de Commerce et des Socie¤te¤s de et a'Luxembourg and the registered office of the Company.

The company is registered on the official list of collectiveundertakings pursuant to Part I of the Luxembourg law ofDecember 20, 2002 relating to collective investmentundertakings. The Company qualifies as an undertaking forcollective investment in transferable securities (a ‘‘UCITS’’)and has obtained recognition for marketing its shares incertain Member states of the European Union under ECCouncil Directive 89/611 as amended. However, theprovisions of article 27 of the Law relating to collectiveinvestment undertakings will only become applicable asfrom February 13, 2007 or any earlier date as the

Company may decide, at which time the Prospectus will beupdated. The article 27 of the Law relating to collectiveinvestment undertakings applies to investment companieswhich have not designated an investment managementcompany.

The Company is subject to the supervision of theLuxembourg regulator, the ‘‘Commission de Surveillancedu Secteur Financier’’.

The Company has an ‘‘umbrella’’ structure comprisingvarious sub-funds (the ‘‘Funds’’) with different investmentobjectives and represented by one or more Classes ofShares as described in this Prospectus. The Board ofDirectors may authorise the creation of additional Funds inthe future with different investment objectives, subject tothe amendment of this simplified Prospectus.

Shares are offered or in issue in the Funds, Classes andcurrencies as described in page 2.

The Board of Directors of the Company may decide tooffer or issue in any Fund any of the existing Classes ofShares which terms and conditions are more fullydescribed in the section ‘‘Classes of Shares ^ Sales ChargeStructure’’ of the Prospectus, including AlternativeCurrency Class of Shares in any other currency than theFund base currency. Shareholders will be informed of theissue of such Shares upon publication of the net assetvalue per Shares of such Class of Share as described underthe section ‘‘Publication of Share Prices’’.

The English version of this Simplified Prospectus shallprevail over any other translation.

Anti-Money Laundering Legislation

Pursuant to the Law of April 5, 1993 relating to thefinancial sector (as amended), and to the circulars of theLuxembourg supervisory authority (especially the IMLcirculars 91/75 and 94/112 and the BCL circular 98/153),obligations have been imposed on all professionals of thefinancial sector to prevent the use of UCITS for moneylaundering purposes. Within this context a procedure forthe identification of investors has been imposed.

Queries and Additional Information

For any query or more detailed information about FranklinTempleton Investments Funds, please contact :Franklin Templeton International Services S.A., Client &Dealer Services, 26 boulevard Royal, L-2449 Luxembourg,tel : (352) 46 66 67 212, fax: (352) 46 66 76, e-mail :[email protected] www.franklintempleton.luor your local Franklin Templeton Investmentsrepresentative.

Introduction 3

Franklin Templeton Investment Funds 1

Funds BaseCurrency

Classes AlternativeCurrency

Classes in AlternativeCurrency

Franklin Aggressive Growth Fund USD A (acc)+B (acc)+I (acc)+N (acc)

Franklin Biotechnology Discovery Fund USD A (acc)+B (acc)+I (acc)+N (acc)

Franklin European Growth Fund EUR A (acc)+I (acc)+N (acc)

Franklin European Small-Mid Cap Growth Fund EUR A (acc) EUR+I (acc) EUR+N (acc) EUR USD B (acc) USD

Franklin Global Growth Fund USD A (acc)+N (acc)

Franklin Global Small-Mid Cap Growth Fund USD A (acc)+B (acc)+N (acc)

Franklin High Yield Fund USD A (acc)+A (dis)+B (dis)+C (acc)+I (dis)+N (acc)

Franklin High Yield (Euro) Fund EUR A (acc)+A (dis)+I (acc)+N(acc)

Franklin Income Fund USD A (dis)+B (dis)+C (acc)+I (acc)+N (acc)

Franklin Technology Fund USD A (acc) USD+B (acc) USD+N (acc) USD EUR N (acc) EUR

Franklin U.S. Equity Fund USD A (acc) USD+B (acc) USD+C (acc) USD+I (acc)USD+N (acc) USD

EUR A (acc) EUR+N (acc)EUR+I (acc) EUR

Franklin U.S. Government Fund USD A (dis) USD+AX (acc) USD+B (dis) USD+N (dis) USD+B (acc) USD+C (acc) USD+I (dis) USD+N (acc) USD

Franklin U.S. Growth Fund USD A (acc)+B (acc)+C (acc)+I (acc)+N (acc)

Franklin U.S. Short-Term Bond Fund USD A (dis)+AX (acc)+B (acc)+B (dis)+C (dis)+I (acc)+N (dis)

Franklin U.S. Small-Mid Cap Growth Fund USD A (acc)+B (acc)+N (acc)

Franklin U.S. Total Return Fund USD A (acc)+A (dis)+B (acc)+B (dis)+N (dis)+C (dis)+I (acc)

Franklin Mutual Beacon Fund USD A (acc) USD+A (dis) USD+B (acc) USD+C (acc)USD+I (acc) USD+N (acc) USD

EUR A (acc) EUR+N (acc) EUR

Franklin Mutual European Fund EUR A (acc) EUR+I (acc) EUR+N (acc) EUR USD A (acc) USD+B (acc) USD+C (acc) USD+N (acc) USD

Franklin Templeton Global Growth and ValueFund

USD A (acc)+B (acc)+C (acc)+I (acc)+N(acc)

Franklin Templeton Japan Fund YEN A (acc) YEN EUR N (acc) EUR

Templeton Asian Growth Fund USD A (acc) USD+A (dis) USD+C (acc) USD+I (acc)USD+N (acc) USD

EUR I (acc) EUR

Templeton China Fund USD A (acc)+I (acc)+N (acc)

Templeton Eastern Europe Fund EUR A (acc)+I (acc)+N (acc)

Templeton Emerging Markets Fund USD A (acc) USD+A (dis) USD+B (acc) USD+C (acc)USD+I (acc) USD+N (acc) USD

N (acc) EUR

Templeton Emerging Markets Bond Fund USD A (dis) USD+B (dis) USD+C (acc) USD+I (acc)USD+N (acc) USD

EUR A (dis) EUR

Templeton Euro Liquid Reserve Fund EUR A (acc)+A (dis)+N (acc)

Templeton Euroland Fund EUR A (acc)+I (acc)+N (acc)

Templeton Euroland Bond Fund EUR A (dis)+I (acc)+N (acc)

Templeton European Fund EUR A (acc) EUR+I (acc) EUR+N (acc) EUR USD A (acc) USD+A (dis) USD+N (acc) USD

Templeton European Total Return Fund EUR A (acc)+A (dis)+I (acc)+N (acc)

Templeton Global Fund USD A (acc)+A (dis)+B (acc)+C (acc)+I (acc)+N (acc)

Templeton Global (Euro) Fund EUR A (acc)+A (dis)+I (acc)+N (acc)

Templeton Global Balanced Fund USD A (acc) USD+A (dis) USD+B (acc) USD EUR A (acc) EUR+N (acc) EUR

Templeton Global Bond Fund USD A (dis) USD+AX (acc) USD+B (dis) USD+C (dis)USD+I (acc) USD+N (acc) USD

EUR A (acc) EUR+A (dis) EUR+I (acc) EUR+N (acc) EUR

Templeton Global Bond (Euro) Fund EUR A (acc)+A (dis)+I (acc)+N (acc)

Templeton Global Smaller Companies Fund USD A (acc)+A (dis)+I (acc)+N (acc)

Templeton Global Total Return Fund USD A (acc)+A (dis)+B (acc)+B (dis)+I (acc)+N (acc)

Templeton Growth (Euro) Fund EUR A (acc)+A (dis)+I (acc)+N (acc)

Templeton Japan Fund USD A (acc)+N (acc)

Templeton Korea Fund USD A (acc)+N (acc)

Templeton Latin America Fund USD A (acc)+A (dis)+N (acc)

Templeton Thailand Fund USD A (acc)+N (acc)

Templeton U.S. Dollar Liquid Reserve Fund USD A (acc)+A (dis)+B (dis)+C (acc)+N (acc)

Templeton U.S. Value Fund USD A (acc)+B (acc)+C (acc)+I (acc)+N (acc)

NOTES:

1. With effect from December 13, 2004, Class BX Shares are renamed Class N Shares.

2. With effect from February 7, 2005, Class N (acc) EUR Shares of the Templeton Global Bond Fund will be merged into Class N (acc) Shares of Templeton Global Bond(Euro) Fund and all references to this Class should no longer be valid.

2 Franklin Templeton Investment Funds

4 4 Board of Directors and Officers

4 4 Registrar and Transfer, Corporate, Domiciliary and

Administrative Agent

4 4 Custodian, Principal Paying Agent and Listing Agent

4 4 Auditors

5 4 Franklin Aggressive Growth Fund

6 4 Franklin Biotechnology Discovery Fund

7 4 Franklin European Growth Fund

8 4 Franklin European Small-Mid Cap Growth Fund

9 4 Franklin Global Growth Fund

104 Franklin Global Small-Mid Cap Growth Fund

114 Franklin High Yield Fund

124 Franklin High Yield (Euro) Fund

134 Franklin Income Fund

144 Franklin Technology Fund

154 Franklin U.S. Equity Fund

164 Franklin U.S. Government Fund

174 Franklin U.S. Growth Fund

184 Franklin U.S. Short-Term Bond Fund

194 Franklin U.S. Small-Mid Cap Growth Fund

204 Franklin U.S. Total Return Fund

214 Franklin Mutual Beacon Fund

224 Franklin Mutual European Fund

234 Franklin Templeton Global Growth and Value Fund

244 Franklin Templeton Japan Fund

254 Templeton Asian Growth Fund

264 Templeton China Fund

274 Templeton Eastern Europe Fund

284 Templeton Emerging Markets Fund

294 Templeton Emerging Markets Bond Fund

304 Templeton Euro Liquid Reserve Fund

314 Templeton Euroland Fund

324 Templeton Euroland Bond Fund

334 Templeton European Fund

344 Templeton European Total Return Fund

354 Templeton Global Fund

364 Templeton Global (Euro) Fund

374 Templeton Global Balanced Fund

384 Templeton Global Bond Fund

394 Templeton Global Bond (Euro) Fund

404 Templeton Global Smaller Companies Fund

414 Templeton Global Total Return Fund

424 Templeton Growth (Euro) Fund

434 Templeton Japan Fund

444 Templeton Korea Fund

454 Templeton Latin America Fund

464 Templeton Thailand Fund

474 Templeton U.S. Dollar Liquid Reserve Fund

484 Templeton U.S. Value Fund

494 Risk Considerations

544 Classes of Shares

544 Sales Charge Structure

564 Dividend Policy

564 Calculation and Publication of Shares Prices

574 Subscription

584 Exchange of Shares

594 Redemption of Shares

594 Trading Policy

604 Taxation of the Company

614 Taxation of Shareholders

614 Past Performance

614 Total Expense Ratio

624 Soft commisions

624 Risk Management

624 Data Protections

634 Appendix: List of Funds, Classes of Shares and ISIN

Codes

Table of Contents 3


The Board of Directors is responsible for the Company’s management and control, including the determination ofinvestment policy. It has appointed the Franklin Templeton Investments Managers mentioned for each Fund.

Chairman:

The Honorable Nicholas F. Brady,Chairman and Chief Executive OfficerCHOPTANK PARTNERS INC.16 North Washington Street, Easton, MD 21601, USA

Directors:

Martin L. Flanagan, Co-PresidentFRANKLIN RESOURCES, INC.One Franklin Parkway, San Mateo, CA 94403-1906, USA

Gregory E. Johnson, Co-PresidentFRANKLIN RESOURCES, INC.One Franklin Parkway, San Mateo, CA 94403-1906, USA

Dr. J. B. Mark Mobius, Director EmeritusTEMPLETON ASSET MANAGEMENT LTD7 Temasek Boulevard, #38-03 Suntec Tower One,Singapore 038987

Mark G. Holowesko, PresidentTEMPLETON CAPITAL ADVISERS LIMITEDBox N-7759, West Bay Street, Lyford Cay, Nassau,Bahamas

Gregory E. McGowan,Executive Vice President and General CounselTEMPLETON WORLDWIDE, INC.500 East Broward Boulevard, Suite 2100, Fort Lauderdale,FL 33394-3091, USA

His Grace the Duke of Abercorn, James Hamilton KG,ChairmanABERCORN ESTATESBarons Court, Newtonstewart, Omagh BT78 4EZ,Northern Ireland, UK

The Right Reverend Michael A. Mann K.C.V.O.The Cottage, Lower End Farm, Eastington, NorthleachGL54 3PN, England, UK

Richard H. Frank, Managing DirectorDARBY OVERSEAS INVESTMENTS LIMITED1133 Connecticut Avenue NW, Suite 400, Washington DC20036, USA

David E. Smart, Director and CEOFRANKLIN TEMPLETON INVESTMENT MANAGEMENTLIMITEDTimes Place, 45 Pall Mall, London SW1Y 5JG, England,UK

The Honourable Trevor G. Trefgarne,Audit Committee MemberGARRO SECURITIES LIMITED235 Vauxhall Bridge Road, London SW1V 1EJ, England,UK

James J.K. Hung, President & CEOL’THAN METALS, INCFloor 5-1N 23 Section 3 Jen-Ai RoadTaipei, Taiwan

General Manager:

William Lockwood, DirectorFRANKLIN TEMPLETON INTERNATIONAL SERVICESS.A.26, boulevard Royal, L-2449 Luxembourg

Registrar and Transfer, Corporate,Domiciliary and Administrative Agent

FRANKLIN TEMPLETON INTERNATIONAL SERVICESS.A.26, boulevard Royal, L-2449 LuxembourgThe Registrar and Transfer, Corporate, Domiciliary andAdministrative Agent is responsible for :4 processing the issue, redemption and exchange of

Shares4 the maintenance of accounting records4 the maintenance of the shareholder register of the

Company4 all other administrative functions as required by the

laws of the Grand Duchy of Luxembourg.

Custodian, Principal Paying Agent and Listing Agent

J.P. MORGAN BANK LUXEMBOURG S.A.5, rue Plaetis, L-2338 Luxembourgfrom February 1st, 2005 the address will be :European Bank & Business Centre6 route de Tre'vesL-2633 Senningerberg

J.P.Morgan Bank Luxembourg S.A. has been appointedCustodian of the Company’s assets, including the securitiesand cash of the Company, which will be held directly orthrough correspondents, nominees, agents or delegates ofthe Custodian.

J.P.Morgan Bank Luxembourg S.A. performs the custodialfunctions in accordance with the Luxembourg law relatingto collective investment undertakings.

Auditors

PRICEWATERHOUSECOOPERS S.a'.r.l.400, route d’Esch, B.P. 1443, L-1014 Luxembourg

" Board of Directors and Officers


Fund detailsType of Fund: Equity Fund

Base currency: USD

Launch date: 3 April 2000

Management charges: Monthly fee equivalent to 1.00 % per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares, except Class I shares. For I (acc) : 0.70%

Total Expense Ratio: A (acc) : 1.89%; B (acc) : 3.14%; I (acc) : n/a ; N (acc) : 2.68%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA

What does the Fund invest in?Investment objective4 Capital appreciation.

Investment strategyThe Fund will invest primarily in equity securities ofUS issuers with strong growth potential across a widerange of sectors. At no time will the InvestmentManager invest more than 10% of the Fund’s total netassets into non-investment grade debt securities asdefined by an accredited rating agency.

Who should invest in the Fund?Investors . . .4 seeking capital appreciation by investing in

equity securities4 seeking a growth investment in sectors showing

above average growth or growth potential ascompared with the overall economy

4 seeking an investment concentrated in equities ofU.S. issuers

4 planning to hold their investment for themedium to long term

What are the risks of investing in the Fund?4 Biotechnology and Technology Sectors risk4 Equity risk4 Growth Stocks risk4 Small and Mid-Sized Companies risk

See the Section ‘‘Risk Considerations’’ for a fulldiscussion of these risks.

Past Performance:The following charts show the historical returns of the Fund expressed in percentage. Please see the Section‘‘Past Performance’’ for the assumptions used in these charts.

Franklin Aggressive Growth Fund 3



Base currency: USD


Management charges: Monthly fee equivalent to 1.00% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares, except Class I shares. For I (acc) : 0.70%

Total Expense Ratio: A (acc) : 2.13%; B (acc) : 3.38%; I (acc) : n/a ; N (acc) : 2.84%


What does the Fund invest in?Investment objective

4 Capital appreciation

Investment strategyThe Fund will invest primarily in equity securities ofbiotechnology companies and discovery research firmslocated in the US and other countries and to a lesserextent in debt securities of any type of foreign or USissuers. The Fund invests a substantial portion of itsassets in smaller capitalisation companies, which aregenerally companies with a market capitalisation ofless than USD 2 billion at the time of the Fund’sinvestment. At no time will the Investment Managerinvest more than 10% of the Fund’s total net assetsinto non-investment grade debt securities as definedby an accredited rating agency.


equity securities4 seeking a growth investment in the

biotechnology sector in the US and around theworld


What are the risks of investing in the Fund?4 Biotechnology and Technology Sectors risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Small and Mid-Sized Companies risk



" Franklin Biotechnology Discovery Fund



Base currency: EUR

Launch date: 29 December 2000

Management charges: Monthly fee equivalent to 1.00% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares, except Class I shares. For I (acc) : 0.70%.

Total Expense Ratio: A (acc) : 2.07%; I (acc) : n/a; N (acc) : 2.83%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc.has appointed Fiduciary Trust Company International as sub-advisorin relation to the Franklin European Growth Fund)

What does the Fund invest in?Investment objective4 Long-term capital appreciation

Investment strategyThe Fund will invest no less than half of its net assetsin a portfolio of listed equity or equity-relatedsecurities. At least two-thirds of the Fund’s net assetswill be invested in transferable securities issued bycompanies or governments or public bodies havingtheir place of incorporation or their principal businessactivities in various European countries. No morethan 5% of the Fund’s net assets will be invested intransferable securities issued by companies,governments or public bodies in the Czech Republic,Hungary, Poland or Turkey.

Who should invest in the Fund?Investors . . .4 seeking long-term capital appreciation by

investing in equity securities4 seeking a growth investment concentrated in

companies of any European country4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Equity risk4 Foreign Currency risk4 Growth Stocks risk


2003 2002 200120

0

-20

-40

-60


Franklin European Growth Fund 3



Base currency: EUR



Total Expense Ratio: A (acc) EUR: 2.00%; B (acc) USD:3.26%; I (acc) EUR: n/a; N (acc)EUR: 2.86%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc.has appointed Fiduciary Trust Company International as sub-advisorin relation to the Franklin European Small-Mid Cap Growth Fund)


Investment strategyThe Fund will invest primarily in a diversifiedportfolio of small and mid-cap growth equity andequity-related securities of companies locatedthroughout Europe.The Fund invests in companies with a marketcapitalisation above Euro 100 million and below Euro8 billion or the equivalent in local currencies at thetime of purchase.


investing in equity securities4 seeking a growth investment concentrated in

small or mid-cap companies of any Europeancountry


What are the risks of investing in the Fund?4 Equity risk4 Foreign Currency risk4 Growth Stocks risk4 Small and Mid-Sized Companies risk



" Franklin European Small-Mid Cap Growth Fund



Base currency: USD


Management charges: Monthly fee equivalent to 1.00% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares.

Total Expense Ratio: A (acc) : 2.18%; N (acc) : 2.96%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc.has appointed Fiduciary International Inc. as sub-advisor in relation toFranklin Global Growth Fund)


Investment strategyThe Fund will invest primarily in listed equities andequity related securities throughout the world.The Fund invests in growth stocks, includingconvertible securities and warrants, in both developedand emerging markets, and in companies listed onthe stock markets in the following regions andcountries : North America; Continental Europe; theUnited Kingdom and Ireland; Asia; and Australia.


investing in equity securities4 seeking a growth investment in companies

around the world4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Growth Stocks risk4 Warrants risk



Franklin Global Growth Fund 3



Base currency: USD



Total Expense Ratio: A (acc) : 1.90%; B (acc) : 3.16%; N (acc) : 2.67%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc.has appointed Fiduciary Trust Company International as sub-advisorin relation to the Franklin Global Small-Mid Cap Growth Fund)

What does the Fund invest in?Investment objective4 Long-term capital appreciation.

Investment strategyThe Fund invests primarily in a diversified portfolioof small and mid-cap growth equity and equityrelated securities from any developed country in theworld, which are US Dollar or non-US Dollardenominated.The Fund invests in small-mid cap companies with amarket capitalisation below USD 8 billion at the timeof purchase.


investing in equity securities4 seeking a growth investment in small or mid-cap

companies around the world4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Equity risk4 Foreign Currency risk4 Growth Stocks risk4 Small and Mid-Sized Companies risk


Past Performance:The following charts show the historical returns of the Fund expressed in percentage. Please see the Section‘‘‘Past Performance’’ for the assumptions used in these charts.

" Franklin Global Small-Mid Cap Growth Fund


Fund detailsType of Fund: Fixed Income Fund

Base currency: USD

Launch date: 1 March 1996

Management charges: Monthly fee equivalent to 0.80% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares, except Class I shares. For I (dis) : 0.60%

Total Expense Ratio: A (dis) : 1.54%; A (acc) : 1.55%; B (dis) : 2.89%; C (acc) : 2.42%;I (dis) : 0.80%; N (acc) : 2.14%


What does the Fund invest in?Investment objective4 Primary objective: to earn a high level of current

income4 Secondary objective: capital appreciation

Investment strategyThe Fund will invest primarily in fixed income debtsecurities of US or non-US issuers that, in thejudgement of the Investment Manager, offer thehighest yield available without excessive risk at thetime of the purchase.The Fund normally will be invested in fixed incomedebt securities with investment grade or lower graderatings, if issued by US issuers, or, if issued by non-US issuers or unrated, their equivalent.The Fund may also, temporarily and/or on anancillary basis, seek investment opportunities in anyother types of securities. The Fund may also investup to 10% of its total assets in securities in default.The Fund may invest up to 10% of its assets incredit-linked securities.

Who should invest in the Fund?Investors . . .4 wishing to earn a high level of income, and to a

lesser extent, some capital appreciation4 seeking investment primarily high-yielding fixed

income securities of U.S. and non-U.S. issuers4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Foreign Currency risk4 Interest Rate Security risk4 Low-Rated Security risk



Franklin High Yield Fund 3



Base currency: EUR



Total Expense Ratio: A (acc) : 1.61%; A (dis) : 1.62%; I (acc) : n/a ; N (acc) : 2.20%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc.has appointed Fiduciary Trust International Limited as sub-advisor inrelation to the Franklin High Yield (Euro) Fund)

What does the Fund invest in?Investment objective4 Primary objective: to earn a high level of current

income4 Secondary objective: capital appreciation

Investment strategyThe Fund will invest primarily in fixed income debtsecurities of European or non-European issuers that,in the judgement of the Investment Manager, offer thehighest yield available without excessive risk at thetime of the purchase.The Fund will principally invest in Euro-denominatedor non-Euro denominated Euro-hedged, fixed incomedebt securities with non-investment grade ratings, orif unrated, their equivalent.The Fund may also, temporarily and/or on anancillary basis, seek investment opportunities in anyother types of Euro denominated securities. The Fundmay invest up to 10% of its assets in credit-linkedsecurities. The Fund may also invest up to 10% of itstotal assets in securities in default.The name of this Fund reflects the base currency ofthe Fund being in Euro, and does not imply that anyparticular proportion of the Fund’s net invested assetswill be made in Euro.

Who should invest in the Fund?Investors . . .4 wishing to earn a high level of income, and to a

lesser extent, some capital appreciation in aFund with the Euro as its base currency

4 seeking investment primarily in Euro-denominated high-yielding fixed incomesecurities


What are the risks of investing in the Fund?4 Credit risk4 Foreign Currency risk4 Interest Rate Security risk4 Low-Rated security risk



" Franklin High Yield (Euro) Fund


Fund detailsType of Fund: Balanced Fund

Base currency: USD

Launch date: 1 July 1999


Total Expense Ratio: A (dis) : 1.69%; B (dis) : 2.94%; C (acc) : 2.44%; I (acc) : n/a;N (acc) : 2.19%


What does the Fund invest in?Investment objective4 To maximise income while maintaining

prospects for capital appreciation

Investment strategyThe Fund will invest in a diversified portfolio oftransferable securities consisting of equity securitiesand long and short-term debt securities of companiesfrom a variety of industries such as utilities, oil, gas,real estate and consumer goods. The Fund may investin debt securities that are rated below investmentgrade.The Fund may invest up to 25% of its net investedassets in non-US securities.

Who should invest in the Fund?Investors . . .4 seeking a level of income and prospects of some

capital appreciation4 wishing to access a portfolio of both equity and

fixed income securities via a single Fund4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Foreign Currency risk4 Interest Rate Security risk4 Low-Rated Security risk



Franklin Income Fund 3



Base currency: USD



Total Expense Ratio: A (acc) USD: 1.89%; B (acc) USD: 3.13%; N (acc) USD: 2.63%;N (acc) EUR: 2.63%


What does the Fund invest in?Investment objective4 Capital appreciation

Investment strategyThe Fund will invest at least two thirds of its total netinvested assets in equity securities of companiesexpected to benefit from the development,advancement, and use of technology.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


equity securities4 seeking a growth investment in the technology

sector in the US and around the world4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Biotechnology and Technology Sectors risk4 Equity risk4 Low-Rated Security risk



" Franklin Technology Fund



Base currency: USD


Management charges: Monthly fee equivalent to 1.00% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares, except Class I shares. For I (acc) USD: 0.70%; For I (acc)EUR: 0.70%

Total Expense Ratio: A (acc) USD: 1.85%; A (acc) EUR: 1.85%; B (acc) USD: 3.10%;C (acc) USD: 2.60%; I (acc) USD: 1.00%; I (acc) EUR: n/a; N (acc)USD: 2.60%; N (acc) EUR: 2.60%


What does the Fund invest in?Investment objective4 Capital appreciation

Investment strategyThe Fund will invest primarily in US equity securities,including common and preferred stocks, or securitiesconvertible into common stocks, as well as AmericanDepository Receipts and American Depository Sharesthat are listed on the major US stock exchanges.On an ancillary basis, the Fund may employ hedgingtechniques and hold cash reserves from time to time.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.

Who should invest in the Fund?Investors . . .4 seeking capital appreciation through a blend

style investment in a well-diversified core USequity Fund


What are the risks of investing in the Fund?4 Derivative risk4 Equity risk4 Low-Rated Security risk



Franklin U.S. Equity Fund 3



Base currency: USD

Launch date: 28 February 1991


Total Expense Ratio: A (dis) : 1.32%; B (dis) : 2.52%; B (acc) : 2.52%; C (acc) : 2.38%;I (dis) : 0.60%; AX( acc) : 1.51% (previously IX (acc)) ;N (dis) : 2.02%; N (acc) : 2.03%


What does the Fund invest in?Investment objective4 Safety of principal and income

Investment strategyThe Fund will invest primarily in debt obligationsissued or guaranteed by the United States of Americagovernment and its agencies.

Who should invest in the Fund?Investors . . .4 wishing a degree of safety of initial investments

as well as income4 seeking investment primarily debt securities of

the U.S. government and it agencies4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Interest Rate Securities risk


2003 2002 200120

10

0

-10

-20


" Franklin U.S. Government Fund



Base currency: USD

Launch date: 29 August 2003


Total Expense Ratio: A (acc) : 1.91%; B (acc) : 3.22%; C (acc) : 2.68%; I (acc) : 1.09%;N (acc) : 2.70%



Investment strategyThe Fund will invest primarily in equity securities ofcompanies located in the United States. The Fundmay also invest in equity securities of companieslocated in other countries but listed on a US stockexchange. The Fund may, on an ancillary basis, investin American Depository Receipts.

Who should invest in the Fund?Investors . . .4 seeking long-term capital appreciation through a

growth investment concentrated in US equitysecurities


What are the risks of investing in the Fund?4 Equity risk4 Growth Stocks risk


2003 2002 200120

10

0

-10

-20

Past Performance:Due to its recent inception, calendar year past performance is not available for this fund.

Franklin U.S. Growth Fund 3



Base currency: USD



Total Expense Ratio: A (dis) : 1.15%; AX (acc) : 1.35% (previously IX (acc)) ; B (dis) :2.35%; B (acc) : 2.35%; C (dis) : 2.17%; I (acc) : n/a; N (dis) : 1.85%


What does the Fund invest in?Investment objective4 High level of current income, consistent with

preservation of capital

Investment strategyThe Fund will invest primarily in US investmentgrade fixed income securities with a targeted averageduration of less than 3 years. For the purposes ofthis Fund, investment grade securities are thosesecurities rated BBB- by S&P or Moody’s Baa3 orhigher. In addition, the Fund may seek to obtainmarket exposure to the securities in which itprimarily invests by entering into a series of purchaseand sale contracts or by using other investmenttechniques including mortgage dollar rolls.

Who should invest in the Fund?Investors . . .4 seeking a high level of income consistent with

capital preservation4 wishing to invest in fixed income securities from

U.S. issuers with a duration of less than 3 years4 planning to hold their investment for the

medium term

What are the risks of investing in the Fund?4 Credit risk4 Interest Rate Securities risk4 Mortgage Dollar Roll risk4 ‘‘Pre-Payment’’ risk4 Securities Lending risk4 Swap Agreement risk


Past Performance:Due to its recent inception, calendar year past performance is not available for this fund

" Franklin U.S. Short-Term Bond Fund



Base currency: USD



Total Expense Ratio: A (acc) : 1.93%; B (acc) : 3.13%; N (acc) : 2.68%


What does the Fund invest in?Investment objective4 Long-term capital growth.

Investment strategyThe Fund will invest at least two thirds of its netassets in the equity securities of US small andmedium capitalisation companies. For this Fund,mid-cap companies are those companies with marketcapitalisation values not exceeding USD 8.5 billionand small-cap companies are those companies withmarket capitalisation values not exceeding: (i) USD1.5 billion; or (ii) the highest market cap value in theRussell 2000 Index, whichever is greater at the timeof the purchase. In addition, the Fund may invest inequity securities of larger companies.

Who should invest in the Fund?Investors . . .4 seeking long-term capital growth4 seeking a growth investment concentrated in US

small-mid cap growth companies4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Equity risk4 Small and Mid-Sized Companies risk



Franklin U.S. Small-Mid Cap Growth Fund 3



Base currency: USD



Total Expense Ratio: A (dis) : 1.20%; A (acc) : 1.20%; B (acc) : 2.65%; B (dis) : 2.65%;C (dis) : 2.30%; I (acc) : n/a; N (dis) : 1.90%


What does the Fund invest in?Investment objective4 Primary objective: high level of current income,

consistent with preservation of capital4 Secondary objective: capital appreciation over

the long term

Investment strategyThe Fund will invest at least 75% of its net assets ininvestment grade debt securities issued by US issuersfrom various market sectors.The Fund may also invest up to 5% of its total netassets in distressed securities and securities in defaultand up to 10% of its total net assets in securitiesissued by non-US issuers and up to 15% of its totalnet assets in non-investment grade debt securities andinvestments.The fund may also invest up to 10 % of its total netassets in securities in default.In addition, the Fund may seek to obtain marketexposure to the securities in which it primarily investsby entering into a series of purchase and salecontracts or by using other investment techniquesincluding mortgage dollar rolls.

Who should invest in the Fund?Investors . . .4 seeking a high level of income and capital

preservation, and to a lesser extent, capitalgrowth

4 wishing to invest in fixed income securities fromUS government or corporate issuers


What are the risks of investing in the Fund?4 Credit risk4 Interest Rate Securities risk4 Low-Rated Security risk4 Mortgage Dollar Roll risk4 ‘‘Pre-Payment’’ risk4 Securities Lending risk4 Swap Agreement risk



" Franklin U.S. Total Return Fund



Base currency: USD



Total Expense Ratio: A (acc) USD: 1.88%; A (acc) EUR: 1.87%; A (dis) USD: n/a; B (acc)USD: 3.12%; C (acc) USD: 2.61 %; I (acc) USD: n/a; N (acc) USD:2.62%; N (acc) EUR: 2.63%

Investment Manager: Franklin Mutual Advisers, LLC, Short Hills, NJ, USA

What does the Fund invest in?Investment objective4 Primary objective: capital appreciation4 Secondary objective: income

Investment strategyThe Fund will invest primarily in common stock,preferred stock, and debt securities convertible orexpected to be convertible into common or preferredstock.No more than 30% of the Fund’s net assets will beinvested in securities of non-US issuers.Within the limits established by the investmentrestrictions, the Fund will also seek to invest in thesecurities of companies involved in mergers,consolidations, liquidations and reorganisations or asto which there exist tender or exchange offers, andmay participate in such transactions.

Who should invest in the Fund?Investors . . .4 seeking capital appreciation and to a lesser

extent income through investment inundervalued companies based primarily in theUS


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Restructuring Companies risk



Franklin Mutual Beacon Fund 3



Base currency: EUR



Total Expense Ratio: A (acc) EUR: 1.88 %; A (acc) USD: 1.88%; B (acc) USD: 3.13%;C (acc) USD: 2.57%; I (acc) EUR: n/a; N (acc) EUR: 2.63%;N (acc) USD: 2.66%

Investment Manager: Franklin Mutual Advisers, LLC, Short Hills, NJ, U.S.A.

What does the Fund invest in?Investment objective4 Primary objective: capital appreciation, which

may occasionally be short term4 Secondary objective: income

Investment strategyThe Fund will primarily invest in equity securitiesand debt securities convertible or expected to beconvertible into common or preferred stock ofcompanies incorporated or having their principalactivities in European countries that the managerbelieves are available at prices less than their actualvalue based on certain recognised or objective criteria(intrinsic value).The Fund may invest up to 10% of its total netinvested assets in securities of US issuers and othernon-European issuers.

Who should invest in the Fund?Investors . . .4 seeking capital appreciation, which may

occasionally be short term and to a lesser extent,income

4 seeking investment in undervalued companies ofany European country


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Restructuring Companies risk


Past Performance:The following charts show the historical returns of the Fund expressed in percentage. Please see the Section‘‘Past Performance’’ for the assumptions used in these charts

" Franklin Mutual European Fund



Base currency: USD

Launch date: 9 September 2002



Investment Manager: Franklin Templeton Alternative Strategies, Inc., Wilmington, Delaware,U.S.A. (Franklin Templeton Alternative Strategies, Inc has appointedTempleton Investment Counsel, LLC and Fiduciary Trust CompanyInternational as sub-advisors in relation to Franklin Templeton GlobalGrowth and Value Fund.)

What does the Fund invest in?Investment objective4 Long-term capital appreciation.

Investment strategyThe Fund will invest in equity securities and debtsecurities convertible or expected to be convertibleinto common or preferred stocks of companies of anymarket capitalisation located anywhere in the world,including emerging markets.At least half of the Fund’s assets without taking intoaccount ancillary liquid assets shall be made in equitysecurities or similar instruments.The Fund may also invest in American, European andGlobal Depositary Receipts.

Who should invest in the Fund?Investors . . .4 seeking long term capital appreciation by

investing in a portfolio combining both ‘growth’and ‘value’ equities from around the world


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk4 Foreign Currency risk



Franklin Templeton Global Growth and Value Fund 3



Base currency: YEN



Total Expense Ratio: A (acc) YEN: 1.95%; N (acc) EUR: 2.70%

Investment Manager: Franklin Templeton Investments Japan Limited


Investment strategyThe Fund will invest primarily in equity securities ofissuers incorporated or having their principal businessactivities in Japan.In addition, the Fund may also seek investmentopportunities in other types of securities such aspreferred stock, securities convertible into commonstock, and corporate and government debt obligationswhich are Japanese Yen and non-Japanese Yendenominated.

Who should invest in the Fund?Investors . . .4 seeking capital appreciation by investing in a

growth-style investment concentrated in Japaneseequity securities


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk



" Franklin Templeton Japan Fund



Base currency: USD

Launch date: 30 June 1991


Total Expense Ratio: A (dis) USD: 2.29%; A (acc) USD: 2.29%; C (acc) USD: 2.92%;I (acc) USD: 1.30%; I (acc) EUR: n/a ; N (acc) USD: 2.79%

Investment Manager: Templeton Asset Management Ltd, Singapore


Investment strategyThe Fund will invest primarily in equity securities ofentities which are incorporated, or have their area ofprimary activity, in the Asia Region.The Fund may also invest in equity securities, whichare listed on recognised exchanges in capital marketsof the Asia Region (excluding Australia, New Zealandand Japan).


investing in securities of companies in Asia,including emerging markets

4 planning to hold their investment for themedium-long term

What are the risks of investing in the Fund?4 Emerging Markets risk4 Equity risk4 Foreign Currency risk



Templeton Asian Growth Fund 3



Base currency: USD






Investment strategyThe Fund will invest primarily in equity securities ofcompanies; (i) organised under the laws of or withtheir principal offices in the People’s Republic ofChina (‘‘China’’), Hong Kong or Taiwan; or (ii) whichderive the principal portion of their revenue fromgoods or services sold or produced, or have theprincipal portion of their assets in China, Hong Kongor Taiwan.The Fund may also invest in equity securities ofcompanies; (i) for which the principal market for thetrading of securities is China, Hong Kong or Taiwan;or (ii) that are linked to assets or currencies in China,Hong Kong or Taiwan.

Who should invest in the Fund?Investors . . .4 seeking long-term capital by investing in equity

securities of China4 planning to hold their investment for the

medium-long term

What are the risks of investing in the Fund?4 Emerging Markets risk4 Equity risk4 Foreign Currency risk



" Templeton China Fund



Base currency: EUR

Launch date: 10 November 1997





Investment strategyThe Fund will invest primarily in listed equitysecurities of publicly traded companies organisedunder the laws of, or with their principal activitieswithin, the countries of Eastern Europe, as well as theNew Independent States (‘‘the Region’’).The Fund may also invest in securities issued by thegovernments of the above-mentioned countries andprivatisation certificates of companies located, or withtheir principal activities, within the Region. The Fundwill invest primarily in companies; (i) of which, iflisted, the principal equity securities market is in theRegion; or (ii) that derive at least 50% of theirrevenues or profits from goods produced or sold,investments made, or services performed, in theRegion or that have at least 50% of their assetssituated in the Region.


investing in the Eastern European region,including emerging markets

4 planning to hold their investment for themedium-long term

What are the risks of investing in the Fund?4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Non-Regulated Markets risk4 Russian and Eastern European Markets risk



Templeton Eastern Europe Fund 3



Base currency: USD



Total Expense Ratio: A (acc) USD: 2.67%; A (dis) USD: 1.93%; B (acc) USD: 3.20%;C (acc) USD: 3.27%; I (acc) USD: n/a ; N (acc) USD: 3.15%; N (acc)EUR: 3.17%



Investment strategyThe Fund will invest primarily in equity securities,and as an ancillary matter in debt obligations, issuedby corporations incorporated or having their principalbusiness activities in, and governments of, developingor emerging nations.The Fund may also invest in those companies, whichderive a significant proportion of their revenues orprofits from emerging economies or have a significantportion of their assets in emerging economies.The Fund may also invest in equity and debtsecurities of issuers that are linked to assets orcurrencies of emerging nations.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in emerging markets - either on itsown, or as part of a fully diversified portfolio


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Securities risk



" Templeton Emerging Markets Fund



Base currency: USD



Total Expense Ratio: A (dis) USD: 1.95%; A (dis) EUR: 1.93%; B (dis) USD: 3.20%;C (acc) USD: 2.73%; I (acc) USD: n/a; N (acc) USD: 2.42%

Investment Manager: Franklin Advisers Inc. San Mateo, CA, USA

What does the Fund invest in?Investment objective4 Maximise total investment return, consisting of a

combination of interest income and capitalappreciation

Investment strategyThe Fund will invest primarily in fixed and floatingrate debt securities and obligations issued bycorporations, governments or government-relatedentities of developing or emerging nations, includingBrady bonds, and debt obligations issued bysupranational entities organised or supported byseveral national governments in Emerging Markets. Inaddition, the Fund may purchase preferred stock,common stock and other equity linked securities,warrants, and debt securities exchangeable orconvertible into common stock.At no time will the Investment Manager invest morethan 10% of the Fund’s net invested assets into equitysecurities.

Who should invest in the Fund?Investors . . .4 seeking potentially above-average levels of

income and capital appreciation by investing inemerging markets fixed income securities


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Securities risk



Templeton Emerging Markets Bond Fund 3


Fund detailsType of Fund: Liquid Reserve Fund

Base currency: EUR


Management charges: Monthly fee equivalent to 0.40% per annum of the Fund’s averagedaily net assets received by the Investment Manager for each Classesof Shares

Total Expense Ratio: A (dis) : 0.96%; A (acc) : 0.94%; N (acc) : 1.85%

Investment Manager: Franklin Advisers, Inc., San Mateo, CA, USA (Franklin Advisers, Inc. has

appointed Fiduciary Trust International Limited as sub-advisor in relation to the

Templeton Euro Liquid Reserve Fund)


Investment strategyThe Fund will invest principally in transferablesecurities issued or guaranteed by the governments ofany nation worldwide and eligible securities ofcorporate issuers of any nation.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.

Who should invest in the Fund?Investors . . .4 seeking investments in high-quality securities,

primarily Euro-denominated or hedged back tothe Euro

4 planning to hold their investment for the shortterm

What are the risks of investing in the Fund?4 Credit Risk4 Foreign Currency risk (for non-Euro investors

only)4 Low-Rated Securities risk



" Templeton Euro Liquid Reserve Fund



Base currency: EUR

Launch date: 8 January 1999



Investment Manager: Franklin Templeton Investment Management Limited, Edinburgh, UK


Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations of any issuer in a membercountry of the European Monetary Union includingcorporations and governments, whether denominatedin Euro or relevant national currency, and in stock ordebt obligations denominated in Euro of any otherissuer.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in undervalued equity securities issuedby the member countries of the EuropeanMonetary Union


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Interest Rate securities risk4 Low-Rated Security risk

See the Section ‘‘Risk considerations’’ for a fulldiscussion of these risks.


Templeton Euroland Fund 3



Base currency: EUR

Launch date: 8 January 1999


Total Expense Ratio: A (dis) : 1.49%; I (acc) : n/a; N (acc) : 2.23%



Templeton Euroland Bond Fund)

What does the Fund invest in?Investment objective4 Maximise total investment return, through a

combination of interest income and capitalappreciation

Investment strategyThe Fund will invest in a portfolio of Eurodenominated fixed, floating rate and asset backedtransferable debt securities, and in Euro-denominateddebt obligations of government, supranational,government-related and corporate issuers worldwide.The assets of the Fund shall primarily be invested ininvestment grade securities issued by issuers fromcountries part of the European Monetary Union(‘‘EMU’’). The Fund will hold no more than 15% ofits net assets in securities issued by; (i) non-EMUmember states; and/or (ii) such issuers with Standard& Poor’s and Moody’s ratings of BB+ or below andBa1 or below respectively.At no time will the Investment Manager invest morethan 10% of the Fund’s net invested assets into equitysecurities.

Who should invest in the Fund?Investors . . .4 seeking to maximise total investment return,

through a combination of interest income andcapital appreciation

4 primarily interested in current income from debtsecurities of any issuer from member countriesof the European Monetary Union


What are the risks of investing in the Fund?4 Credit risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Security risk



" Templeton Euroland Bond Fund



Base currency: EUR



Total Expense Ratio: A (acc) EUR: 1.90%; A (acc) USD: 1.90%; A (dis) USD: 1.90%;I (acc) EUR: n/a; N (acc) EUR: 2.66%; N (acc) USD: 2.65%



Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations issued by European corporationsand governments.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in undervalued securities of anyEuropean country


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Interest Rate Securities risk4 Low-Rated Security risk



Templeton European Fund 3



Base currency: EUR



Total Expense Ratio: A (dis) : 1.10%; A (acc) : 1.10%; I (acc) : n/a ; N (acc) : 1.80%



Templeton European Total Return Fund)

What does the Fund invest in?Investment objective4 To maximise, consistent with prudent

investment management, total investment returnconsisting of a combination of interest income,capital appreciation, and currency gains.

Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations issued by European corporationsand governments.The Fund may invest in investment grade and non-investment grade debt securities, subject to a 30%maximum allocation of the Fund’s total net assets innon-investment grade debt, including high yieldcorporate debts, private placements, global bonds andcurrencies of the emerging markets countries, ofwhich up to 10% of the Fund’s total net assets maybe in securities in default.



4 wishing to invest in fixed income securities fromEuropean governments or corporate issuers


What are the risks of investing in the Fund?4 Credit risk4 Derivative risk4 Equity risk4 Interest Rate Securities risk4 Low-Rated Security risk



" Templeton European Total Return Fund



Base currency: USD



Total Expense Ratio: A (dis) : 1.92%; A (acc) : 1.92%; B (acc) : 3.16%;C (acc) : 2.67%;I (acc) : 1.01%; N (acc) : 2.67%

Investment Manager: Templeton Global Advisors Limited, Nassau, Bahamas (Templeton Global

Advisors Limited has appointed Franklin Templeton Investment Management Limited

as sub-advisor in relation to Templeton Global Fund.)


Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations of companies and governmentsof any nation.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in undervalued securities in a well-diversified, core, global equity fund


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Security risk



Templeton Global Fund 3



Base currency: EUR



Total Expense Ratio: A (dis) : 2.02%; A (acc) : 2.00%; I (acc) : n/a N (acc) : 2.79%



Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations of companies and governmentsof any nation.The name of the Fund reflects the base currency ofthe Fund being in Euro, and does not imply that anyparticular proportion of the Fund’s net invested assetswill be made in Euro.


investing in undervalued securities in a well-diversified core global equity fund with the Euroas its base currency


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Foreign Currency risk4 Interest Rate Securities risk



" Templeton Global (Euro) Fund


Fund detailsType of Fund: Balanced Fund

Base currency: USD



Total Expense Ratio: A (dis) USD: 1.70%; A (acc) USD: 1.70%; A (acc) EUR: n/a; B (acc)USD: 2.95%; N (acc) EUR: 2.21%

Investment Manager: Franklin Templeton Investment Management Limited, Edinburgh, UK(Franklin Templeton Investment Management Limited has appointed Franklin

Advisers, Inc. as sub-advisor in relation to Templeton Global Balanced Fund.)

What does the Fund invest in?Investment objective4 Capital appreciation and current income

Investment strategyThe Fund will invest in equity and corporate debtsecurities and, to a lesser extent, governmentsecurities issued by entities throughout the world.The Fund will seek income by investing in fixed orfloating rate securities and debt obligations ofgovernment, government-related and corporate issuersin countries around the world.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities, as defined by anaccredited rating agency and more than 40% of theFund’s total net assets into fixed income securities.

Who should invest in the Fund?Investors . . .4 seeking a combination of capital appreciation

and a level of income4 wishing to access a portfolio of both equity and

fixed income securities via a single fund4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk4 Low-Rated Security risk



Templeton Global Balanced Fund 3



Base currency: USD



Total Expense Ratio: A (dis) USD: 1.49%; A (dis) EUR: 1.49%; A (acc) EUR: 1.50%;AX (acc) USD: 1.68%; B (dis) USD: 2.94%; C (dis) USD: 2.29%;I (acc) USD: 0.89%; I (acc) EUR: n/a ; N (acc) USD: 2.17%;N (acc) EUR: 2.19%


What does the Fund invest in?Investment objective4 Maximise total investment return consisting of a

combination of interest income, capitalappreciation and currency gains

Investment strategyThe Fund will invest primarily in a portfolio of fixedor floating rate debt securities and debt obligations ofgovernment, government-related or corporate issuersworldwide.The Fund may also, in accordance with theinvestment restrictions, invest in securities orstructured products linked to assets or currencies ofany nation.The Fund may also purchase debt obligations issuedby supranational entities organised or supported byseveral national governments.

Who should invest in the Fund?Investors . . .4 seeking to maximise total investment return

consisting of a combination of interest income,capital appreciation and currency gains

4 primarily interested in current income from debtsecurities of global issuers


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Security risk



" Templeton Global Bond Fund



Base currency: EUR





What does the Fund invest in?Investment objective4 To maximise total return consisting of a

combination of interest income, capitalappreciation and currency gains

Investment strategyThe Fund will invest in a portfolio of fixed or floatingrate debt securities and debt obligations primarilyissued by government, government-related orcorporate issuers worldwide.The Fund may also, in accordance with theinvestment restrictions, invest in securities orstructured products linked to assets or currencies ofany nation.The non-Euro component of the portfolio will behedged into Euro.The name of this Fund reflects the base currency ofthe Fund being in Euro, and does not imply that anyparticular proportion of the Fund’s net invested assetswill be made in Euro.

Who should invest in the Fund?Investors . . .4 seeking to maximise total investment return

consisting of a combination of interest income,capital appreciation and currency gains

4 primarily interested in current income from ofEuro and non-Euro denominated debt securitiesof global issuers


What are the risks of investing in the Fund?4 Credit risk4 Derivative risk4 Emerging Markets risk4 Foreign Currency risk4 Interest Rate Securities risk4 Low-Rated Security risk

See the Section ‘‘Risk considerations’’ for a fulldiscussion of these risks.


Templeton Global Bond (Euro) Fund 3



Base currency: USD






Investment strategyThe Fund will invest primarily in equity securitiesand debt obligations of smaller companies (companieswith a market capitalisation of under USD 2 billion orequivalent at the time of purchase) throughout theworld.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in undervalued equity securities ofsmall-cap companies from around the world


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk4 Low-Rated Security risk4 Russian and Eastern European Markets risk4 Small and Mid-Sized Companies risk



" Templeton Global Smaller Companies Fund



Base currency: USD



Total Expense Ratio: A (dis) : 1.33%; A (acc) : 1.33%; B (acc) : 2.79%; B (dis) : 2.78%;I (acc) : n/a; N (acc) : 2.04%



Templeton Global Total Return Fund)

What does the Fund invest in?Investment objective4 To maximise, consistent with prudent

investment management, total investment returnconsisting of a combination of interest income,capital appreciation, and currency gains

Investment strategyThe Fund will invest in a portfolio of fixed andfloating rate debt securities and debt obligations ofgovernments, government-related or corporate issuersworldwide. The Fund may also, in accordance withthe investment restrictions, invest in securities orstructured products where the security is linked to orderives its value from another security, linked toassets or currencies of any nation. The Fund may alsopurchase mortgage and asset-backed securities,convertible bonds, and use financial futures contracts,or options on such contracts, on governmentsecurities worldwide. The Fund may invest ininvestment grade and non-investment grade debtsecurities issued by US and non-US issuers, and mayinvest up to 10% in securities in default.For efficient portfolio management, the Fund maybuy and sell future contracts or options on suchcontracts.The Fund may also participate in mortgage dollar rolltransactions.



4 wishing to invest in fixed income securities fromany global government or corporate issuers


What are the risks of investing in the Fund?4 Credit risk4 Derivative risk4 Emerging Markets risk4 Interest Rate Securities risk4 Low-Rated Security risk4 Mortgage Dollar Roll risk



Templeton Global Total Return Fund 3



Base currency: EUR



Total Expense Ratio: A (dis) : 2.01%; A (acc) : 1.94%; I (acc) : 1.01%; N (acc) : 2.69%

Investment Manager: Templeton Global Advisors Limited, Nassau, Bahamas


Investment strategyThe Fund will invest primarily in the equity securitiesof companies located anywhere in the world,including emerging markets.The Fund will also invest in American, European, andGlobal Depository Receipts. Depending upon currentmarket conditions, the Fund may also invest up to25% of its net assets in debt securities of companiesand governments located anywhere in the world.The name of the Fund reflects the base currency ofthe Fund being in Euro and does not imply that anyparticular proportion of the Fund’s net invested assetswill be made in Euro.


investing in undervalued securities in a well-diversified, core, global equity fund with theEuro as its base currency


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk



" Templeton Growth (Euro) Fund



Base currency: USD






Investment strategyThe Fund will invest primarily in equity securities ofissuers incorporated or having their principal businessactivities in Japan.The Fund may also invest in equity securities ofissuers having assets, earnings or profits in Japan. TheFund will invest in both equities and other securities,including securities issued by the Japanesegovernment and, to a lesser extent, warrants of issuerson the Japanese stock market.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.


investing in undervalued equity securities fromissuers in Japan


What are the risks of investing in the Fund?4 Credit risk4 Equity risk4 Interest Rate Securities risk4 Low-Rated Securities risk4 Warrants risk



Templeton Japan Fund 3



Base currency: USD

Launch date: 8 May 1995





Investment strategyThe Fund will invest primarily in equity securitiesissued by Korean incorporated companies orcompanies having their principal business activities inKorea.The Fund may also invest in equity securities ofissuers having assets, earnings or profits in Korea.The Fund will invest in equities and other securities,including securities issued by the Korean governmentand, to a lesser extent, warrants of issuers on theKorean stock market.


investing in equity securities from Korea4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk4 Warrants risk



" Templeton Korea Fund



Base currency: USD



Total Expense Ratio: A (dis) : 2.47%; A (acc) : 2.48%; N (acc) : 2.95%



Investment strategyThe Fund will invest primarily in equity securitiesand as an ancillary matter in debt securities of issuersincorporated or having their principal businessactivities in the Latin American region. The balance ofthe Fund’s assets may be invested in equity securitiesand debt obligations of companies and governmententities of countries other than the above region.


investing in equity securities in Latin America,including emerging markets


What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk



Templeton Latin America Fund 3



Base currency: USD






Investment strategyThe Fund will invest primarily in equity securities ofissuers incorporated in Thailand or issuers havingtheir principal business activities in Thailand.The Fund may also invest in equity securities ofissuers having their assets, earnings or profits inThailand.The Fund will invest in equities and other securities,including securities issued by the Thailandgovernment and, to a lesser extent, warrants of issuerson the Thailand stock market.


investing in equity securities of Thailand4 planning to hold their investment for the

medium to long term

What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Equity risk4 Interest Rate Securities risk4 Warrants risk



" Templeton Thailand Fund


Fund detailsType of Fund: Liquid Reserve Fund

Base currency: USD



Total Expense Ratio: A (dis) : 0.86%; A (acc) : 0.86%; B (dis) : 1.14%; C (acc) : 1.15%;N (acc) : 1.12%



Investment strategyThe Fund will invest principally in transferablesecurities issued or guaranteed by the governments ofany nation worldwide and eligible securities ofcorporate issuers of any nation.At no time will the Investment Manager invest morethan 10% of the Fund’s total net assets into non-investment grade debt securities as defined by anaccredited rating agency.

Who should invest in the Fund?Investors . . .4 seeking safety of principal and income4 seeking investments in high-quality securities,

primarily U.S. dollar denominated or hedgedback to the U.S. dollar

4 planning to hold their investment for the shortterm

What are the risks of investing in the Fund?4 Credit risk4 Emerging Markets risk4 Foreign Currency risk (for non-US dollar

investors only)4 Interest Rate Securities risk4 Low-Rated Securities risk



Templeton U.S. Dollar Liquid Reserve Fund 3



Base currency: USD




Investment Manager: Franklin Templeton Investments Corp., Toronto, Ontario


Investment strategyThe Fund will invest in equity securities of companiesin the United States and may invest in securities ofany size.The Fund may use various derivative strategiesseeking to protect its assets, implement a cash or taxmanagement strategy or enhance its returns.The Fund may enter into swap agreements up to 5%of its total assets.


investing in undervalued equity securities fromissuers concentrated in the US


What are the risks of investing in the Fund?4 Derivative risk4 Equity risk4 Swap Agreement risk



" Templeton U.S. Value Fund


Risk Considerations

What are the risks of investing in a Fund?Because the securities the Fund holds fluctuate inprice, the value of your investment in the Fund

will go up and down. This means you could losemoney over short or even extended periods.

A Fund may own securities of different types, orfrom different asset classes equities, bonds, money

market instruments depending on the fund’sinvestment objectives. For example, a fund whoseobjective is long-term capital gain will likely investmostly in equities. A fund whose main objective is

to preserve capital in the short term will likelyhave most of its holdings in money market

securities.

Different investments have different types ofinvestment risk. The Funds also have differentkinds of risk, depending on the securities they

own. Below is a summary of the various types ofinvestment risk that may be applicable to theFund that you decide to purchase. The funddescriptions will tell you which specific risks

apply to each Fund.

Biotechnology and Technology Sectors riskInvestment in the biotechnology and technologysectors may present a greater risk and a highervolatility than investment in a broader range ofsecurities covering different economic sectors. Inaddition, these sectors may be subject to greatergovernment regulation than other sectors and, as aresult, changes to such government regulation mayhave a material adverse effect on these sectors. Suchinvestments may therefore drop sharply in value inresponse to market, regulatory or research setbacks inaddition to possible adverse effects from thecompetition of new market entrants, patentconsiderations and product obsolescence. Particularlywithin technology, short product cycles anddiminishing profit margins are additional factors toconsider when investing.

Credit riskCredit risk, a fundamental risk relating to all fixedincome securities, is the chance that an issuer will failto make principal and interest payments when due.Issuers with higher credit risk typically offer higheryields for this added risk. Conversely, issuers withlower credit risk typically offer lower yields.Generally, government securities are considered to bethe safest in terms of credit risk, while corporate debt,especially those with poorer credit ratings, have thehighest credit risk. Changes in the financial conditionof an issuer, changes in economic and political

conditions in general, or changes in economic andpolitical conditions specific to an issuer, all are factorsthat may have an adverse impact on a firm’s creditquality and security values.

Credit-linked Securities riskCredit-linked securities are debt securities thatrepresent an interest in a pool of, or are otherwisecollateralized by, one or more corporate debtobligations or credit default swaps incorporated debtor bank loan obligations. Such debt obligations mayrepresent the obligations of one or more corporateissuers. The Fund has the right to receive periodicinterest payments from the issuer of the credit-linkedsecurity (usually the seller of the underlying creditdefault swap(s)) at an agreed-upon interest rate, and areturn of principal at the maturity date.

The Funds bear the risk of loss of its principalinvestment, and the periodic interest paymentsexpected to be received for the duration of itsinvestment in the credit-linked security, in the eventthat one or more of the debt obligations underlyingthe credit default swaps go into default or otherwisebecome non-performing. Upon the occurrence ofsuch a credit event (including bankruptcy, failure totimely pay interest or principal, or a restructuring),the Fund affected will generally reduce the principalbalance of the related credit-linked security by theFund’s pro rata interest in the par amount of thedefaulted underlying debt obligation in exchange forthe actual value of the defaulted underlyingobligation or the defaulted underlying obligationitself, resulting in a loss of a portion of the Fund’sinvestment. Thereafter, interest on the credit-linkedsecurity will accrue on a smaller principal balanceand a smaller principal balance will be returned atmaturity. To the extent a credit-linked securityrepresents an interest in underlying obligations of asingle corporate or other issuer, a credit event withrespect to such issuer presents greater risk of loss toa Fund than if the credit-linked security representedan interest in underlying obligations of multipleissuers.

In addition, the Fund bears the risk that the issuer ofthe credit-linked security will default or becomebankrupt. In such an event, the Fund may havedifficulty being repaid, or fail to be repaid, theprincipal amount of its investment and the remainingperiodic interest payments thereon.

An investment in credit-linked securities also involvesreliance on the counterparty to the credit defaultswap entered into with the issuer of the credit-linkedsecurity to make periodic payments to the issuerunder the terms of the swap. Any delay or cessationin the making of such payments may be expected in


certain instances to result in delays or reductions inpayments to the Fund as an investor in such credit-linked securities. Additionally, credit-linked securitiesare typically structured as limited recourse obligationsof the issuer of such securities such that the securitiesissued will usually be obligations solely of the issuerand will not be obligations or responsibilities of anyother person.

Most credit-linked securities are structured as Rule144A securities so that they may be freely tradedamong institutional buyers. A Fund will generallyonly purchase credit-linked securities, which aredetermined to be liquid in accordance with theFund’s liquidity guidelines. However, the market forcredit-linked securities may suddenly become illiquid.The other parties to the transaction may be the onlyinvestors with sufficient understanding of thederivative to be interested in bidding for it. Changesin liquidity may result in significant, rapid andunpredictable changes in the prices for credit-linkedsecurities. In certain cases, a market price for a credit-linked security may not be available or may not bereliable, and the Fund could experience difficulty inselling such security at a price the investmentmanager believes is fair. The credit-linked securitiesstructured as Rule 144A securities will be included inthe calculation of the limits for non-listed securities.

The value of a credit-linked security will typicallyincrease or decrease with any change in value of theunderlying debt obligations, if any, held by the issuerand the credit default swap. Further, in cases wherethe credit-linked security is structured such that thepayments to the Fund are based on amounts receivedin respect of, or the value of performance of, anyunderlying debt obligations specified in the terms ofthe relevant credit default swap, fluctuations in thevalue of such obligation may affect the value of thecredit-linked security.

Defaulted Debt Securities riskSome Funds may invest in debt securities on whichthe issuer is not currently making interest payments(defaulted debt securities). These Funds may buydefaulted debt securities if, in the opinion of theInvestment Manager, it appears likely that the issuermay resume interest payments or other advantageousdevelopments appear likely in the near future. Thesesecurities may become illiquid.

The risk of loss due to default may also beconsiderably greater with lower-quality securitiesbecause they are generally unsecured and are oftensubordinated to other creditors of the issuer. If theissuer of a security in a Fund’s portfolio defaults, theFund may have unrealized losses on the security,which may lower the Fund’s net asset value per share.

Defaulted securities tend to lose much of their valuebefore they default. Thus, the Fund’s net asset valueper share may be adversely affected before an issuerdefaults. In addition, the Fund may incur additionalexpenses if it must try to recover principal or interestpayments on a defaulted security.

Derivative riskFor the purpose of efficient portfolio management,the Company may, within the context of each Fund’soverall investment policy, and within the limits setforth in the investment restrictions applicable to theFunds, engage in certain transactions involving theuse of derivative instruments, including; (i) put andcall options on securities, debt obligations, indicesand currencies (including over-the-counter (‘‘OTC’’)options) ; (ii) stock index and interest rate futurescontracts and options thereon; (iii) structuredproducts, where the security is linked to or derives itsvalue from another security; and (iv) delayed deliveryor when-and-if issued securities such as may becreated as a result of a debt restructuring. TheCompany may engage, within the limits establishedby the investment restrictions, in various portfoliostrategies involving the use of hedging instruments inorder to hedge against market and currency risks.

The use of derivative instruments and hedgingtransactions may or may not achieve its intendedobjective and involves special risks.

Included among the issuers of debt securities orobligations in which the Company may invest areentities organised and operated solely for the purposeof restructuring the investment characteristics ofvarious securities or obligations. These entities may beorganised by investment banking firms, which receivefees in connection with establishing each entity andarranging for the placement of its securities.

EmergingMarkets riskAll Funds investments in the securities issued bycorporations, governments, and public-law entities indifferent nations and denominated in differentcurrencies involve certain risks. These risks aretypically heightened in developing countries andemerging markets. Such risks, which can have adverseeffects on portfolio holdings, may include: (i)investment and repatriation restrictions; (ii) currencyfluctuations; (iii) the potential for unusual marketvolatility as compared to more industrialised nations;(iv) government involvement in the private sector ; (v)limited investor information and less stringentinvestor disclosure requirements ; (vi) shallow andsubstantially smaller liquid securities markets than inmore industrialised countries, which means a Fundmay at times be unable to sell certain securities at


desirable prices ; (vii) certain local tax lawconsiderations; (viii) limited regulation of thesecurities markets ; (ix) international and regionalpolitical and economic developments; (x) possibleimposition of exchange controls or other localgovernmental laws or restrictions; (xi) the increasedrisk of adverse effects from deflation and inflation;,and (xii) the possibility of limited legal recourse forthe Fund.

Equity riskThe Value of all Funds that invest in equity andequity related securities will be affected byeconomic, political, market, and issuer specificchanges. Such changes may adversely affect securities,regardless of company specific performance.Additionally, different industries, financial markets,and securities can react differently to these changes.Such fluctuations of the Fund’s value are oftenexacerbated in the short-term as well. The risk thatone or more companies in a Fund’s portfolio will fall,or fail to rise, can adversely affect the overall portfolioperformance in any given period.

Foreign Currency riskSince the Company values the portfolio holdings ofeach of its Funds in either U.S. Dollar, Japanese Yenor Euro, changes in currency exchange rates adverseto those currencies may affect the value of suchholdings and each respective Fund’s yield thereon.

Growth Stocks riskFunds investing in growth stocks can be morevolatile and may react differently to economic,political, market, and issuer specific developmentsthan the overall market. Historically, the prices ofgrowth stocks have been more volatile than othersecurities, especially, over short term periods of time.Growth stocks may also be more expensive, relativeto their earnings, than the market in general. As such,growth stocks can experience greater volatility inreaction to changes in earnings growth.

Initial Public Offerings riskSome Funds may invest in initial public offerings(‘‘IPOs’’). IPO risk is the risk that the market values ofIPO shares may experience high volatility from factorssuch as the absence of a prior public market,unseasoned trading, the limited number of sharesavailable for trading and limited information aboutthe issuer. Additionally, a Fund may hold IPO sharesfor a very short period of time, which may increase aFund’s expenses. Some investments in IPOs may havean immediate and significant impact on a Fund’sperformance.

Interest Rate Securities riskAll Funds that invest in fixed income securities aresubject to interest rate risk. A fixed income security’svalue will generally increase in value when interestrates fall and decrease in value when interest ratesrise. Interest rate risk is the chance that suchmovements in interest rates will negatively affect asecurity’s value or, in a Fund’s case, its net assetvalue. Fixed income securities with longer-termmaturities tend to be more sensitive to interest ratechanges than shorter-term securities. As a result,longer-term securities tend to offer higher yields forthis added risk. While changes in interest rates mayaffect a Fund’s interest income, such changes maypositively or negatively affect the net asset value ofthe Fund’s shares on a daily basis.

Low-Rated Security riskSome Funds may invest in higher-yielding securitiesrated lower than investment grade. Accordingly, aninvestment in these Funds is accompanied by ahigher degree of credit risk. Below investment gradesecurities such as, for example, high yield debtsecurities, may be considered a high risk strategy andcan include securities that are unrated and/or indefault. Lower-quality, higher-yielding securities mayalso experience greater price volatility when comparedto higher-quality, lower-yielding securities.Additionally, default rates tend to rise for companieswith poorer rated securities during economicrecessions or in times of higher interest rates.

Mortgage Dollar Roll riskThe Franklin Income Fund, the Franklin U.S.Government Fund, the Franklin U.S. Short-TermBond Fund, the Franklin U.S. Total Return Fund andthe Templeton Global Total Return Fund may engagein mortgage dollar roll transactions. In a mortgagedollar roll, a Fund sells mortgage-backed securities fordelivery in the current month and simultaneouslycontracts to repurchase substantially similar (name,type, coupon, and maturity) securities on a specifiedfuture date. During the period between the sale andrepurchase (the ‘‘roll period’’), the Fund foregoesprincipal and interest paid on the mortgage-backedsecurities. The Fund is compensated by the differencebetween the current sales price and the lower forwardprice for the future purchase (often referred to as the‘‘drop’’), as well as by the interest earned on the cashproceeds of the initial sale. The Fund could suffer aloss if the contracting party fails to perform the futuretransaction and the Fund is therefore unable to buyback the mortgage-backed securities it initially sold.Mortgage dollar rolls will be entered into only withhigh quality government securities dealers andmember banks of the Federal Reserve System.


Mortgage dollar rolls transactions may (due to thedeemed borrowing position involved), increase theFund’s overall investment exposure and result inlosses. Mortgage dollar rolls will be consideredborrowings for purposes of the Fund’s borrowinglimitations unless the Fund segregates on its books anoffsetting cash position or a position of liquidsecurities of equivalent value.

Non-Regulated Markets riskCertain Funds may invest in securities of issuers incountries whose markets do not qualify as regulatedmarkets due to their economic, legal or regulatorystructure, and therefore these Funds may not investmore than 10% of their net assets in such securities.

‘‘Pre-Payment’’ riskCertain fixed income securities give an issuer the rightto call its securities, before their maturity date, inperiods of declining interest rates. The possibility ofsuch ‘‘pre-payment risk’’ may force the Fund toreinvest the proceeds of such investments in securitiesoffering lower yields, thereby reducing the Fund’sinterest income.

Repurchase Agreement riskThe Company may, on behalf of each Fund, fromtime to time enter, on an ancillary basis, intorepurchase agreement transactions which consist ofthe purchase and sale of securities with a clausereserving the seller the right or the obligation torepurchase from the acquirer the securities sold at aprice and term specified by the two parties in theircontractual arrangement. The Company can act eitheras purchaser or seller in repurchase agreementtransactions or in a series of continuing repurchaseagreement transactions. The Company may not buyor sell securities using a repurchase agreementtransaction unless the counterpart in such transactionis a financial institution of high standing specialisingin this type of transaction. During the life of arepurchase agreement under which the Company hasbought securities, the Company cannot sell thesecurities which are the object of the transactionbefore the right to repurchase these securities hasbeen exercised by the counterpart or before therepurchase term has expired. The Company musttake care to ensure that the level of its exposure torepurchase agreement transactions is such that it isable, at all times, to meet its obligations to redeem itsShares.

Restructuring Companies riskSome Funds may also invest in the securities ofcompanies involved in mergers, consolidations,

liquidations and reorganisations or as to which thereexist tender or exchange offers, and may participate insuch transactions; they may also purchaseindebtedness and participations therein, both securedand unsecured, of debtor companies engaged inreorganisation or financial restructuring. Suchinvestments also involve greater credit risks.

Russian and Eastern EuropeanMarkets riskSecurities of issuers in Russia, countries of EasternEurope as well as the New Independent States andthe countries being under the influence of the SovietUnion in the past involve significant risks and specialconsiderations, which are not typically associated withinvesting in securities of issuers in the EU MemberStates and the United States of America. They areadditional to the normal risks inherent in any suchinvestments and include political, economic, legal,currency, inflation and taxation risks. For examplethere is a risk of loss due to lack of adequate systemsfor transferring, pricing, accounting for andsafekeeping or record keeping of securities.

In particular, the Russian market presents a variety ofrisks in relation to the settlement and safekeeping ofsecurities. These risks result from the fact thatphysical securities do not exist ; as a consequence, theownership of securities is evidenced only on theissuer’s register of shareholders. Each issuer isresponsible for the appointment of its own registrar.The result is a broad geographic distribution ofseveral hundred registrars across Russia. Russia’sFederal Commission for Securities and CapitalMarkets (the ‘‘Commission’’) has defined theresponsibilities for registrar activities, including whatconstitutes evidence of ownership and transferprocedures. However, difficulties enforcing theCommission’s regulations mean that the potential forloss or error still remains and there is no guaranteethat the registrars will act according to the applicablelaws and regulations. Widely accepted industrypractices are actually still in the process of beingestablished. When registration occurs, the registrarproduces an extract of the register of shareholders asat that particular point in time. Ownership of sharesis vested in the records of the registrar but is notevidenced by the possession of an extract of theregister of shareholders. The extract is only evidencethat registration has taken place. However, the extractis not negotiable and has no intrinsic value. Inaddition, a registrar will typically not accept anextract as evidence of ownership of shares and is notobligated to notify the Custodian or its local agents inRussia, if or when it amends the register ofShareholders. Russian securities are not on physicaldeposit with the Custodian or its local agents inRussia.


Therefore, neither the Custodian nor its local agentsin Russia can be considered as performing aphysical safekeeping or custody function in thetraditional sense. The registrars are neither agentsof, nor responsible to, the Custodian or its localagents in Russia. The Custodian’s liability onlyextends to its own negligence and wilful default andto that caused by negligence or willful misconductof its local agents in Russia, and does not extend tolosses due to the liquidation, bankruptcy,negligence or willful default of any registrar. In theevent of such losses the Company will have topursue its rights directly against the issuer and/or itsappointed registrar.

Securities Lending riskThe Company may lend each Fund’s portfoliosecurities to specialised banks, credit institutions andother financial institutions of high standing, orthrough recognised clearing institutions such asClearstream or Euroclear. The lending of securitieswill be made for periods not exceeding thirty (30)calendar days. Loans will be secured continuouslyby collateral consisting of cash, and/or securitiesissued or guaranteed by member states of theOrganisation for Economic Cooperation andDevelopment (‘‘OECD’’) or by their local authoritieswhich at the conclusion of the lending agreement,must be at least equal to the value of the globalvaluation of the securities of each Fund lent. Thecollateral must be blocked in favour of the Companyuntil the termination of the lending contract.Lending transactions may not be carried out onmore than 50% of the aggregate market value of thesecurities of each Fund’s portfolio; provided,however, that this limit is not applicable where theCompany has the right to terminate the lendingcontract at any time and obtain restitution of thesecurities lent. Any transaction expenses inconnection with such loans may be charged to theconcerned Fund.

Small andMid-Sized Companies riskThe stock prices of smaller and mid-sizedcompanies can perform differently than larger, morerecognised, companies and have the potential to bemore volatile. A lower degree of liquidity in theirsecurities, a greater sensitivity to changes in economicconditions and interest rates, and uncertainty overfuture growth prospects may all contribute to suchincreased price volatility. Additionally, smallercompanies may be unable to generate new funds forgrowth and development, may lack depth inmanagement, and may be developing products in newand uncertain markets all of which are risks toconsider when investing in such companies.

Swap Agreements riskThe Company may enter into interest rate, index andcurrency exchange rate swap agreements for purposesof attempting to obtain a particular desired return at alower cost to the Company than if the Company hadinvested directly in an instrument that yielded thatdesired return. Swap agreements are two partycontracts entered into primarily by institutionalinvestors for periods ranging from a few days to morethan one year. In a standard ‘‘swap’’ transaction, twoparties agree to exchange the returns (or differentialsin rates of return) earned or realised on particularpredetermined investments or instruments. The grossreturns to be exchanged or ‘‘swapped’’ between theparties are calculated with respect to a ‘‘notionalamount’’, ie, the return on or increase in value of aparticular US dollar amount invested at a particularinterest rate, in a particular foreign currency, or in a‘‘basket’’ of securities representing a particular index.The ‘‘notional amount’’ of the swap agreement is onlya fictive basis on which to calculate the obligationswhich the parties to a swap agreement have agreed toexchange. The Company’s obligations (or rights)under a swap agreement will generally be equal onlyto the net amount to be paid or received under theagreement based on the relative values of thepositions held by each party to the agreement (the‘‘net amount’’). The Company’s obligations under aswap agreement will be accrued daily (offset againstany amounts owing to the Company) and anyaccrued but unpaid net amounts owed to a swapcounterparty will be covered by the maintenance of asegregated account consisting of cash, United States ofAmerica government securities, or high grade debtobligations, to avoid any potential leveraging of theCompany’s portfolio. The Company will not enterinto a swap agreement with any single party if the netamount owed or to be received under existingcontracts with that party would exceed 5% of theCompany’s assets.

Whether the Company’s use of swap agreements willbe successful in furthering its investment objectivewill depend on the ability of the Investment Managersto correctly predict whether certain types ofinvestments are likely to produce greater returns thanother investments. Because they are two partycontracts and because they may have terms of greaterthan seven calendar days, swap agreements may beconsidered to be illiquid. Moreover, the Companybears the risk of loss of the amount expected to bereceived under a swap agreement in the event of thedefault or bankruptcy of a swap agreementcounterparty. The Investment Managers will cause theCompany to enter into swap agreements only withcounterparties that would be eligible for considerationas repurchase agreement counterparties under theCompany’s repurchase agreement guidelines.


Warrants riskInvestments in and holding of warrants may result inincreased volatility of the net asset value of certainFunds, which may make use of warrants, andaccordingly is accompanied by a higher degree ofrisk.

Shareholders should understand that allinvestments involve risk and there can be no

guarantee against loss resulting from aninvestment in any Fund(s), nor can there be any

assurance that the Fund(s) investment objective(s)will be attained. Neither the Investment Managers,

nor any of their worldwide affiliated entities,guarantee the performance or any future return of

the Company or any of its Funds.

Classes of Shares

The Shares relating to certain Funds of the Companyare in six Classes :

4 Class A4 Class AX4 Class B4 Class C4 Class I4 Class N

as more fully described below. These Classes may bedenominated in the Fund base currency or in anothercurrency (an ‘‘alternative currency’’). The Companydoes not currently intend to hedge the currencyrisks to which these alternative currency Classesare exposed.

Shares may either be distribution Shares oraccumulation Shares. No distribution of dividendswill be made for accumulation shares, but the netincome attributable will be reflected in the increasedvalue of the Shares.

Before investing in a specific Share Class of any Fund,Investors should ensure that such Class best suitstheir needs and should consider the local taximplications subject to their personal circumstancesand local tax laws. Investors are recommended tocontact a tax advisor or their financial advisor forfurther information.

Sales Charge Structure

Class A Shares4 Initial Sales Charge: up to 6.50% of the total

amount invested. This maximum charge,assuming that no other charges or expense areapplicable, amounts to approximately 6.95% ofthe aggregate Share price of the Shares being

acquired. The Principal Distributor may waivethe initial sales charge in whole or in part.

4 Deferred Sales Charge: 1.00% may apply toredemptions within the first 18 months aftereach qualified investment of USD 1 million ormore. The way this charge is calculated is thesame for all Classes of Shares, with the exceptionof the percentage applicable, and is more fullydescribed in the section Class B Shares.

No exchange with Shares of other Classes(except Class AX Shares) will be allowed forShares subject to such contingent deferred salescharge.

4 Maintenance Charge: up to 0.50% per annum ofthe applicable average net asset value.

Class AX (accumulation) Shares4 Initial Sales Charge: up to 6.50% of the total

amount invested. This maximum charge,assuming that no other charges or expense areapplicable, amounts to approximately 6.95% ofthe aggregate Share price of the Shares beingacquired. The Principal distributor may wave theinitial sales charge in whole or in part.

4 Deferred Sales Charge: 1.00% may apply toredemptions within the first 18 months aftereach investment of USD 1 million or more.

4 Maintenance charge: up to 0.50% per annum ofthe applicable net asset.

Class B Shares4 Initial Sales Charge: Purchases of Class B Shares

are not subject to an initial sales charge.

4 Contingent Deferred Sales Charge (‘‘CDSC’’) :applicable if an investor redeems Shares withinfour years of purchase. There is no CDSC onShares acquired through reinvestment ofdividends. To keep the CDSC as low as possible,each time a request to sell Shares is placed, anyShares in the Shareholder’s account not subjectto a CDSC will be sold first.

The following rates will apply:

Years Since Purchase CDSCLess than one year 4.00%Equal or more than one year but lessthan two years

3.00%

Equal or more than two years but lessthan three years

2.00%

Equal or more than three years but lessthan four years

1.00%

Equal or more than four years 0.00%


The Principal Distributor and/or a duly authorisedparty may waive the CDSC in whole or in part.

4 Maintenance Charge: up to 0.75% per annum ofthe applicable average net asset value.

4 Servicing Charge: 1.00% per annum of theapplicable average net asset value.

Class B shares purchased from January 1, 2004forward shall be automatically converted into Class Ashares of the same fund on the last day of the monthin which the eight years anniversary of purchaseoccurs. Class B Shares purchased by December 31,2003 will be automatically converted into the sameFund’s Class A Shares on December 31, 2011.

Class C Shares4 Contingent Deferred Sales Charge (CDSC): 1.00%

if an investor redeems Shares within one year ofpurchase. To keep the CDSC as low as possible,each time a request to sell Shares is placed, anyShares in the Shareholder’s account not subjectto a CDSC will be sold first. If there are notenough of these Shares to meet the request,additional Shares will be sold in the order theywere purchased.

The Principal Distributor or a duly authorised partymay waive the CDSC in whole or in part.

4 Maintenance and Service Charge: up to 1.10% perannum of the applicable average net asset value.

Class I SharesClass I Shares are only offered to institutionalinvestors as defined from time to time by theguidelines or recommendations of the competentLuxembourg supervisory authority, in certain limitedcircumstances.

Purchases of Class I Shares are not subject to a CDSCor any maintenance, distribution or servicing charge.

Class I Shares have a minimum initial investment ofUSD 5,000,000 (except for the Class I (dis) Shares ofthe Franklin U.S. Government Fund which has aminimum initial investment of USD 1,000,000)(‘‘Minimum Account Balance’’). The PrincipalDistributor may waive the Minimum Account Balancein whole or in part.

Class N Shares4 Initial Sales Charge: up to 3.00% of the total

amount invested. This maximum charge,assuming that no other charges or expenses areapplicable, amounts to approximately 3.09% ofthe aggregate share price of the Shares being

acquired. The Principal Distributor may waivethe initial sales charge in whole or in part.

4 Distribution Charge: up to 1.25% per annum ofthe applicable average net asset value.

Dividend Policy

In respect of all Funds which issue distributionShares, the Board of Directors intends to distributesubstantially all of the income attributable to thedistribution Shares. It is anticipated that distributionswill normally be made as set out below:

Monthly (following the end of each calendarmonth) in the case of Shares relating to thefollowing Funds:

4 Franklin High Yield Fund4 Franklin Income Fund4 Franklin U.S. Government Fund4 Franklin U.S. Short-Term Bond Fund4 Franklin U.S. Total Return Fund4 Templeton European Total Return Fund4 Templeton Global Bond Fund4 Templeton Global Total Return Fund4 Templeton U.S. Dollar Liquid Reserve Fund

Quarterly (following the end of each calendarquarter) in the case of Shares relating to the followingFunds:

4 Templeton Emerging Markets Bond Fund4 Templeton Global Balanced Fund

Annually (in December of each year, further to theresolution of the Shareholders at the Annual GeneralMeeting) in the case of Shares relating to thefollowing Funds:

4 Franklin High Yield (Euro) Fund4 Franklin Mutual Beacon Fund4 Franklin Templeton Japan Fund4 Templeton Asian Growth Fund4 Templeton Emerging Markets Fund4 Templeton Euro Liquid Reserve Fund4 Templeton Euroland Bond Fund4 Templeton European Fund4 Templeton Global Fund4 Templeton Global (Euro) Fund4 Templeton Global Bond (Euro) Fund4 Templeton Global Smaller Companies Fund4 Templeton Growth (Euro) Fund4 Templeton Latin America Fund

Dividends of registered distribution Shares willnormally be reinvested in the subscription of furtherdistribution Shares of the Fund and Class, unlessotherwise stated in the Application Form. In the eventthat cash dividends are payable, they will be paid toholders of registered distribution Shares who have


elected to receive dividends in cash in accordancewith their instructions.

Please note that dividend distributions are notguaranteed, that the Company’s Funds do not pay

interest and that the price of Shares in theCompany’s Funds and any income earned on theShares may go down as well as up. It should also

be remembered that any dividend distributionlowers the value of the Shares in the Company’sFunds by the amount of the distribution. Future

earnings and investment performance can beaffected by many factors, including changes in

exchange rates, not necessarily within the controlof the Company, its directors, officers or any otherperson. No guarantees as to future performance of,or future return from, the Company can be given

by the Company itself, or by any director orofficer of the Company, by Franklin Templeton

Investments, or any of its worldwide affiliates, orby any of their directors, officers or employees.

Calculation and Publication of Share Prices

The prices at which Shares of the relevant Classescan be subscribed for, redeemed or exchanged ineach Class are calculated on each Valuation Day byreference to the net asset value of the Classconcerned. Such prices are available on the followingValuation Day.

A Valuation Day for all Funds is any day on whichthe New York Stock Exchange (NYSE) is open orbanks in Luxembourg are open for normal business(other than during a suspension of normal dealing).

The net asset value per share of each Class of Sharesof each Fund is calculated as follows:

Assets attributable to the Liabilities attributable to theClass of Shares of the Fund

çClass of Shares of the Fund

Number of shares of the relevant Class of Shares of the Fund

The net asset value per Share of each Fund andClass of Shares is made public at the registeredoffice of the Company and is available at the officesof the Principal Distributor and the Transfer Agent.The Company will arrange for the publication of thenet asset value per Share of relevant Funds asrequired under Luxembourg law and in suchnewspapers as the Board of Directors may decidefrom time to time. This information is also availableon the Internet site : http ://www.franklintempleton.lu.The Company cannot accept any responsibility forany error or delay in publication or for non-publication of prices.

Subscription

Subscription of Shares can be made:

(i) on the standard Application Form available atthe office of the Transfer Agent or the relevantappointed Share Distributor; or

(ii) by written application giving the informationstated in the full Prospectus.

Any subsequent purchase of Shares may also be madeby telephone, facsimile or electronic request, ifexpressly allowed by the Transfer Agent.

Applications should be sent or made to the office ofthe Transfer Agent or the relevant appointed ShareDistributor on a Valuation Day before the New YorkStock Exchange closing time or before the equivalentin Luxembourg time on Valuation Days when theNew York Stock Exchange is closed for normalbusiness (usually 10:00 pm CET). However,processing of applications received by a relevant ShareDistributor will only commence once they have beenforwarded to the Transfer Agent or to a distributorduly authorised in writing.

The table below sets out the minimum investments required to subscribe in each available Class of Shares:

Classes of Shares Initial Investment Additional Investment

A (dis), A (acc), AX (acc), B (dis),B (acc), C (dis), C (acc), N (dis),N (acc),

USD 5,000 (or USD 2,500 in case ofan exchange) or the equivalent in anyfreely exchangeable currency

USD 1,000 or the equivalent in anyfreely exchangeable currency

I (dis) and I (acc) USD 5,000,000 (except for the Class I(dis) Shares of the Franklin U.S.Government Fund which has aminimum initial investment of USD1,000,000) or the equivalent in anyfreely exchangeable currency

USD 1,000 or the equivalent in anyfreely exchangeable currency


The Board of Directors of the Company or theTransfer Agent reserves the right, at its owndiscretion, to reject any application in whole or inpart.

Applications received and accepted by the TransferAgent or by a duly authorised Share Distributor on aValuation Day before the New York Stock Exchangeclosing time or before the equivalent in Luxembourgtime on Valuation Days when the New York StockExchange is closed for normal business (usually10:00 pm CET) will be dealt with on that day on thebasis of the net asset value per Share of the relevantClass calculated on that day.

Applications received and accepted by the TransferAgent or by a duly authorised Share Distributor on aValuation Day after the New York Stock Exchangeclosing time or after the equivalent in Luxembourgtime on Valuation Days when the New York StockExchange is closed for normal business (usually10:00 pm CET) will normally be dealt with on thebasis of the net asset value per Share of the relevantClass calculated on the next Valuation Day.

The Board of Directors may permit, if it deems itappropriate, different dealing cut-off times to beagreed with local distributors or for distribution injurisdictions where the different time zone so justifies.In such circumstances, the applicable dealing cut-offtime applied must always precede the time when theapplicable net asset value is calculated and published.Such different cut off time shall be disclosed in thelocal supplement to the Prospectus, the agreements inplace with the local distributors or other marketingmaterial used in the jurisdictions concerned. Refer tothe table on the previous page for the minimuminvestments required to subscribe in each availableClass of Shares.

These minimum investment amounts may be waivedin whole or in part by the Board of Directors or bythe Principal Distributor.

Payment must be made within five (5) Luxembourgbank business days of processing your order, unlessthe Board of Directors requires cleared funds on orprior to an application being accepted. Applicants willbe required to compensate the Company at thediscretion of the Board of Directors for any lossresulting from late payment.

Shares held through Clearstream or Euroclear mustbe settled in the currency of denomination of therelevant Fund or (if applicable) of the relevant Classof Shares and within three (3) Luxembourg bankbusiness days following the Valuation Day.

Payment can be made in the base currency or (ifapplicable) the alternative currency of the selected

Fund(s). However, when allowed by the TransferAgent, an investor may provide for payment in anyother currency which can be freely exchanged for thebase currency of the selected Fund(s). In such case,the necessary foreign exchange transaction will bearranged on behalf of, and at the expense of, theinvestor.

For payment in the alternative currency of theselected Class of Shares, any necessary foreignexchange transaction will be arranged by, and at theexpense of, the Fund. Shares held throughClearstream or Euroclear must be settled in thecurrency of denomination of the relevant Fund or (ifapplicable) of the relevant Class of Shares and withinthree (3) Luxembourg bank business days followingthe Valuation Day.

Investors settling in a currency other than the basecurrency or (if applicable) the alternative currency ofthe Fund(s) for which the investment is intended areadvised that a delay in processing the applicationuntil the next Valuation Day may occur to allow forcurrency conversion.

For approved sub-distributors, intermediaries and/orinstitutional investors, the allotment of Shares isconditional upon receipt of full payment, includingany applicable initial sales charge, which must be paidwithin five (5) Luxembourg bank business days of theValuation Day. If timely payment is not made, anapplication may lapse and be cancelled. The Board ofDirectors may decide from time to time, with respectto specific applications for subscription, that paymentmust be made on the Valuation Day.

Subject to receipt of the full payment and theregistration details, confirmation statements togetherwith registered Share certificates, if requested, will,within fourteen (14) Luxembourg bank business daysof completion of the subscription process, be sent inaccordance with the Applicant’s instructions, at therisk of the Applicant.

If any application is not accepted in whole or in part,the subscription money will be returned to theApplicant through the post or by wire transfer at therisk of the Applicant.

The Board of Directors reserves the right at any time,without notice, to discontinue the issue or sale ofShares pursuant to this Prospectus.

Investors should promptly check the confirmationstatement that is mailed after each transaction in

order to ensure that it has been accuratelyrecorded in their account. Claims should besubmitted in writing to the local Franklin

Templeton Investments servicing office no laterthan thirty (30) days after the processing date.


Exchange of Shares

Shareholders wishing to exchange Shares from oneClass to Shares of the same Class or another Class ofanother Fund or with Shares of another Class of thesame Fund (if available) will be entitled to do so onany Valuation Day before the New York StockExchange closing time subject to the followingexceptions:

4 Class B Shares can only be exchanged with ClassB Shares of another Fund

4 Class C Shares of a Fund can only be exchangedinto Class C Shares of a Fund, which issuesClass C Shares; and

4 Only institutional investors can exchange theirShares into or with Class I shares

The exchange of Class N Shares with Class A Sharesmay be subject to a charge equivalent to thedifference between the two levels of initial salescharges applicable (‘‘sales charge differential’’), exceptfor institutional investors. Such sales chargedifferential may be waived in whole or in part by thePrincipal Distributor.

Class A Shares and Class AX Shares subject to acontingent deferred sales charge can only beexchanged with Shares subject to the same contingentdeferred sales charge.

In addition, in exceptional circumstances, the Boardof Directors may at its discretion, authorise anexchange charge which shall not exceed 1% of thevalue of the Shares being requested for exchange.

Exchange requests may be made in writing or ifexpressly allowed by the Transfer Agent, bytelephone, facsimile or electronic means, specifying:

4 The Class;

4 The Fund;

4 The ISIN codes (please refer to Appendix 1 ofthis Simplified Prospectus for details of ISINcodes) for both Classes involved in theexchange;

4 The number of Shares to be exchanged;

4 Fund currency amount or percentage holding ofShares to be exchanged, together with the samedetails for the Fund(s) into which the exchangeis to be made.

For exchange requests made by telephone, facsimileand electronic means, the Transfer Agent may in itsown discretion request a written and duly signedconfirmation, in which case it may delay the

processing of the request until receipt of writtenconfirmation thereof.

The number of Shares issued upon exchange will bebased upon the respective net asset value of theShares of the two relevant Funds on the ValuationDay on which the exchange request is effected andwill be calculated as follows:

A = [B x (C - D)] x EF

whereA = the number of Shares in the new Fund to which the

Shareholder shall become entitled;

B = the number of Shares in the original Fund which theShareholder has requested to be exchanged;

C = net asset value per Share of the original Fund;

D = calculated amount of exchange charge (if any) payableper Share ;

E = the relevant currency exchange rate (defined as thecurrency exchange factor determined by the Board ofDirectors for the relevant Valuation Day, asrepresenting the effective rate of exchange between thetwo relevant currencies) after adjusting such rate toreflect the effective costs of making the transfer, whenthe original Fund and the new Fund are notdesignated in the same currency and, in any othercase, 1;

F = net asset value per Share of the new Fund.

Any request to exchange Shares may not be executeduntil any previous transaction involving the Shares tobe exchanged has been completed and full paymenton those Shares received.

Exchanges may not, however, be effected if the resultthereof would be that the Shareholder would beregistered as holding less than USD 2,500 (or theequivalent in the currency of denomination of theFund) in value of Shares of the original Fund(s) andalso of the Fund(s) into which his Shares are to beexchanged.

Requests for exchange of Shares on any ValuationDay from a Fund denominated in one currency

into a Fund denominated in another currency willrequire one additional Luxembourg bank business

day in order to effectuate the currencytransactions for such exchange.

Redemption of Shares

Shares of any Class in any Fund can be redeemed onany Valuation Day. The Board of Directors mayrequire that redemption requests be given by suchnotice prior to the Valuation Day on which theredemptions will be effective, as it will reasonablydetermine.


Redemption requests may be made in writing or, ifexpressly allowed by the Transfer Agent, by facsimile,telephone or electronic request specifying:

4 the Class;

4 the Fund;

4 the Class ISIN code (please refer to Appendix 1of this Simplified Prospectus for details of ISINcodes) and

4 number of Shares to be redeemed; or

4 the amount of the redemption stated in theFund’s base currency or, if applicable, the Fund’salternative currency; or

4 the percentage holding of Shares to beredeemed;

4 instructions for the payment of redemptionproceeds.

For redemption requests made by telephone, facsimileand electronic means, the Transfer Agent may in itsown discretion request a written and duly signedconfirmation, in which case it may delay theprocessing of the request until receipt of writtenconfirmation thereof.

Any request to redeem Shares may not be executeduntil any previous transaction involving the Shares tobe redeemed has been completed and full settlementon those Shares received. Such request to redeem willbe dealt with at the net asset value per Sharedetermined on the Valuation Day during which theprevious transaction is completed and fully settled.

Redemption requests received by the Transfer Agentor by a duly authorised Share distributor, on aValuation Day before New York Stock Exchangeclosing time or before the equivalent in Luxembourgtime on Valuation Days when the New York StockExchange is closed for normal business (usually10:00 pm CET) will be dealt with on that day on thebasis of the net asset value per Share of the relevantClass calculated on that day.

Redemption requests received by the Transfer Agentor by a duly authorised Share distributor, after theNew York Stock Exchange closing time or after theequivalent in Luxembourg time on Valuation Dayswhen the New York Stock Exchange is closed fornormal business (usually 10:00 pm CET) willnormally be dealt with on the basis of the net assetvalue per Share of the relevant Class calculated on thenext Valuation Day.

The Board of Directors may permit, if it deems itappropriate, different dealing cut-off times to beagreed with local distributors or for distribution in

jurisdictions where the different time zone so justifies.In such circumstances, the applicable dealing cut-offtime applied must always precede the time when theapplicable net asset value is calculated and published.Such different cut off time shall be disclosed in thelocal supplement to the Prospectus, the agreements inplace with the local distributors or other marketingmaterial used in the jurisdictions concerned.

If a redemption request would result in aShareholder’s investment in any one Fund being lessthan USD 2,500 (or equivalent), the Company mayredeem at any time the full shareholding in that Fundand pay the proceeds to the Shareholder.

Payment of redemption proceeds for anyredemption request made in respect of Sharesrecently purchased by cheque or banker’s draft

may be delayed for up to fifteen (15) Luxembourgbank business days or more to allow the chequeor banker’s draft to clear. A certified or banker’s

cheque may clear in less time.

Trading Policy

Market timing generally. The Company discouragesshort-term or excessive trading, often referred to as‘‘market timing’’, and intends to seek to restrict orreject such trading or take other action, as describedbelow, if in the judgment of the Company or TransferAgent such trading may interfere with the efficientmanagement of the portfolio of any Fund, maymaterially increase the Fund’s transaction costs,administrative costs or taxes, or may otherwise bedetrimental to the interests of the Company and itsshareholders.

Market timing consequences. If informationregarding a shareholder’s trading activity in theCompany or in any other Franklin Templeton fundor non-Franklin Templeton fund is brought to theattention of the Company or the Transfer Agent andbased on that information the Company or its agentsin their sole discretion conclude that such tradingmay be detrimental to the Company as described inthis Market Timing Trading policy, the Company maytemporarily or permanently bar a shareholder’s futurepurchases into the Company or, alternatively, maylimit the amount, number or frequency of any futurepurchases and/or the method by which a shareholdermay request future purchases and redemptions(including purchases and/or redemptions by anexchange or transfer between the Company and anyother Franklin Templeton fund.

In considering a shareholder’s trading activity, theCompany may consider, among other factors, theshareholder’s trading history both directly and, if


known, through financial intermediaries, in theCompany, in other Franklin Templeton funds, innon-Franklin Templeton mutual funds, or in accountsunder common control or ownership.

Market timing through financial intermediaries.Shareholders are subject to this policy whether theyare a direct shareholder of the Fund or are investingindirectly in the Company through a financialintermediary such as a bank, an insurance company,an investment advisor, or any other Distributor thatacts as nominees for Shareholders subscribing theshares in their own name but on behalf of itscustomers (the shares being held in an ‘‘omnibusaccounts’’).

While the Company will encourage financialintermediaries to apply the Company’s market timingtrading policy to their customers who invest indirectlyin the Company, the Company is limited in its abilityto monitor the trading activity or enforce its markettiming trading policy with respect to customers offinancial intermediaries. For example, should it occur,the Company may not be able to detect markettiming that may be facilitated by financialintermediaries or made difficult to identify in theomnibus accounts used by those intermediaries foraggregated purchases, exchanges and redemptions onbehalf of all their customers. More specifically, unlessthe financial intermediaries have the ability to applythe Company’s market timing trading policy to theircustomers through such methods as implementingshort-term trading limitations or restrictions,monitoring trading activity for what might be markettiming, the Company may not be able to determinewhether trading by customers of financialintermediaries is contrary to the Company’s markettiming trading policy.

Risks from market timers. Depending on variousfactors, including the size of the Fund, the amount ofassets the portfolio manager typically maintains incash or cash equivalents and the euro, yen or dollaramount and number and frequency of trades, short-term or excessive trading may interfere with theefficient management of the Fund’s portfolio, increasethe Fund’s transaction costs, administrative costs andtaxes and/or impact Fund performance.

In addition, if the nature of the Fund’s portfolioholdings expose the Fund to shareholders whoengage in the type of market timing trading that seeksto take advantage of possible delays between thechange in the value of a Fund’s portfolio holdingsand the reflection of the change in the net asset valueof the Fund’s shares, sometimes referred to as‘‘arbitrage market timing’’, there is the possibility thatsuch trading, under certain circumstances, may dilute

the value of Fund shares if redeeming shareholdersreceive proceeds (and buying shareholders receiveshares) based upon net asset values which do notreflect appropriate fair value prices. Arbitrage markettimers may seek to exploit possible delays betweenthe change in the value of a Fund’s portfolio holdingsand the net asset value of the Fund’s shares in Fundsthat hold significant investments in foreign securitiesbecause certain foreign markets close several hoursahead of the U.S. markets, and in funds that holdsignificant investments in small-cap securities, high-yield (‘‘junk’’) bonds and other types of investmentswhich may not be frequently traded.

The Company is currently using several methods toreduce the risk of market timing. These methodsinclude:

4 reviewing Shareholder activity for excessivetrading, and

4 committing staff to selectively review on acontinuing basis recent trading activity in orderto identify trading activity that may be contraryto this market timing trading policy.

Though these methods involve judgments that areinherently subjective and involve some selectivity intheir application, the Company seeks to makejudgments and applications that are consistent withthe interests of the Company’s shareholders. There isno assurance that the Company or its agents will gainaccess to any or all information necessary to detectmarket timing in omnibus accounts. While theCompany will seek to take actions (directly and withthe assistance of financial intermediaries) that willdetect market timing, the Company cannot representthat such trading activity can be completelyeliminated.

Revocation of market timing trades. Transactionsplaced in violation of the Company’s market timingtrading policy are not necessarily deemed accepted bythe Company and may be cancelled or revoked bythe Company or Transfer Agent on the Valuationdays following receipt by the Transfer Agent.

Taxation of the Company

The Company is not liable in the Grand Duchy ofLuxembourg to any tax on its profits or income norare dividends paid by the Company liable to anywithholding tax.

The Company is liable in the Grand Duchy ofLuxembourg to a tax of 0.05% per annum of its netasset value, such tax being payable quarterly on thebasis of the value of the net assets of the Company atthe end of the relevant calendar quarter. This tax is


not applicable for the portion of the assets of a Fundinvested in other undertakings for collectiveinvestment which have been already subject to suchtax In order to qualify under the current reduced taxrate of 0.01% (instead of the tax of 0.05% referred toabove), the Templeton U.S. Dollar Liquid ReserveFund and the Templeton Euro Liquid Reserve Fundwill be invested in a manner that the weightedaverage remaining maturity of all securities andinstruments comprised in the portfolios of therespective Funds does not exceed twelve months.

Class I Shares may also qualify for the reduced taxrate of 0.01% if all the shareholders of this Class ofShares are institutional investors.

No stamp duty or other tax is payable in the GrandDuchy of Luxembourg on the issue of the Shares inthe Company.

Under current laws and practice, no capital gains taxis payable in the Grand Duchy of Luxembourg on therealised or unrealised capital appreciation of the assetsof the Company.

Investment income received or capital gains realisedby the Company may be subject to tax in thecountries of origin at varying rates. The Companymay benefit in certain circumstances from doubletaxation treaties, which the Grand Duchy ofLuxembourg has concluded with other countries.

Taxation of Shareholders

Shareholders are currently not subject to any capitalgains, income, withholding, gift, estate, inheritance orother taxes in the Grand Duchy of Luxembourg(except for Shareholders domiciled, resident or havinga permanent establishment in the Grand Duchy ofLuxembourg and except for certain former residentsof the Grand Duchy of Luxembourg if owning morethan 10% of the Share capital of the Company).

The Council of the European Union adoptedDirective 2003/48/ED on the taxation of savingsincome on 3 June 2003. The Directive will requireMember States of the European Union to provide thetax authorities of other Member States with details ofpayments of interest or similar payments paid by anagent within its jurisdiction to an individual residentin that other Member State. Austria, Belgium andLuxembourg will apply withholding tax in relation tosuch payments in lieu of exchange of information.The rate of withholding tax will be 15% from 1 July2005 to 30 June 2008, 20% from 1 July 2008 to 30June 2011 and 35% from 1 July 2011.

Sub-funds that invest wholly or partly in debtinstruments may be within the scope of the Directive.

It is presently uncertain if and to what extentdividend distributions or capital gains realised byinvestors in such funds will be subject to informationreporting or withholding tax. Sub-funds with anobjective of investing in equities only are not withinthe scope of the Directive.

United KingdomThe Company shall apply for certification as a‘‘distributing fund’’ within the meaning of Schedule27 of the UK Income and Corporation Taxes Act1988 in respect of the distribution Share Classesoffered by the Company and for the accountingperiod beginning on July 1, 2004. With respect to thetax implications of a distributing fund, please note thediscussion on dividend policy on page 57 and kindlyconsult a professional advisor as to the possible tax orother consequences. Provided such certification isobtained, Shareholders resident or ordinarily residentin the United Kingdom for tax purposes, subject totheir personal circumstances, will be liable to UnitedKingdom capital gains tax or corporation tax inrespect of gains arising from the sale, redemption, ordisposal of distribution Shares.

Investors should consult their professionaladvisers as to the possible tax or other

consequences of buying, holding, transferring orselling any of the Company’s Shares under thelaws of their countries of citizenship, residence

and domicile.

Past Performance

Past performance is no guarantee of futureperformance. The prices of Shares and income therefrom can go down as well as up, and investors maynot get back the full amount invested. Figures do notreflect sales charges. If they did, returns would bereduced accordingly.

Bar charts are based on data as at 31 December of therelevant year.

For funds offering both class A(dis) and A(acc)shares, only class A(dis) shares performance figuresare shown assuming reinvestment of dividends.Historical performance figures shown for Class A(acc)shares are those for Class A(dis) shares until June 22,2001, and those for class A(acc) shares thereafter.

Performance figures reflect distributions at theircapitalised value together with the growth of the assetvalue for class A(dis) shares and the only growth ofthe asset value for class A(acc) shares. Classes ofShares not showing a performance chart might have adifferent but similar performance from the Classes ofShares showing a performance chart.


Total Expense Ratio

The Total Expense Ratio (‘‘TER’’), expressed as apercentage, represents how the total expenses of theFund relate to the average net assets of the Fund forthe year under review. The total expenses comprisethe investment management fees, the administrationand transfer agency fees, the custodian fees and otherexpenses as summarised in the Statement of Changesin Net Assets of the latest Annual or Semi-AnnualReport of the Company.

The TER figures in this Simplified Prospectus are asat June 30, 2004.

Soft Commissions

Consistent with obtaining best execution, brokeragecommissions on portfolio transactions for theCompany may be directed by the InvestmentManagers to broker-dealers in recognition of researchservices furnished by them as well as for servicesrendered in the execution of orders by such broker-dealers. The receipt of investment research andinformation and related services permits theInvestment Managers to supplement their ownresearch and analysis and makes available to them theviews and information of individuals and researchstaffs of other firms. Such services do not includetravel, accommodation, entertainment, generaladministrative goods or services, general officeequipment or premises, membership fees, employeesalaries or direct money payment, which are paid bythe Investment Managers.

The Company’s soft commissions are subject to thefollowing conditions: (i) the Investment Managers willact at all times in the best interest of the Companywhen entering into soft commission arrangements;(ii) the services provided will be in direct relationshipto the activities of the Investment Managerundertaken in relation to the Company; (iii)brokerage commissions in portfolio transactions for

the Company will be directed by the InvestmentManagers to broker-dealers that are entities and notto individuals ; (iv) the Investment Managers willprovide reports to the Board of Directors with respectto soft commissions including the nature of theservices they receive; and (v) the amount of the softcommissions paid will be set out in the financialstatements of the Company.

Risk Management

The Company employs a risk-management processwhich enables it, with the Investment Managers, tomonitor and measure at any time the risk of thepositions and their contribution to the overall riskprofile of each portfolio. The Company or theInvestment Managers will employ a process foraccurate and independent assessment of the value ofOTC derivative instruments.

Data Protection

All personal data of investors contained in theapplication form and all and any further personal datacollected in the course of the business relationshipwith the Company and/or the Transfer Agent may becollected, recorded, stored, adapted, transferred orotherwise processed and used (‘‘processed’’) by theCompany, the Transfer Agent and other companies ofFranklin Templeton Investments, the Custodian andthe financial intermediary of such investors. Such datashall be processed for the purposes of accountadministration, anti-money laundering identification,tax identification under the European Union TaxSavings Directive 2003/48/EC and the development ofthe business relationship.

To this end, data may be transferred to companiesappointed by the Company or the Transfer Agent tosupport the Company related activity (e.g. clientcommunication agents or paying agents).


LIST OF FUNDS, CLASSES OF SHARES and ISIN CODES

Class No Fund Name and AddressFund/ClassCurrency ISIN Code

799 Franklin Aggressive Growth Fund Class A (acc) USD LU0109391861

858 Franklin Aggressive Growth Fund Class B (acc) USD LU0109391945

616 Franklin Aggressive Growth Fund Class I (acc) USD LU0195948665

625 Franklin Aggressive Growth Fund Class N (acc) USD LU0188150956

796 Franklin Biotechnology Discovery Fund Class A (acc) USD LU0109394709

853 Franklin Biotechnology Discovery Fund Class B (acc) USD LU0109394881

617 Franklin Biotechnology Discovery Fund Class I (acc) USD LU0195948822

733 Franklin Biotechnology Discovery Fund Class N (acc) USD LU0122613499

798 Franklin European Growth Fund Class A (acc) EUR LU0122612848

618 Franklin European Growth Fund Class I (acc) EUR LU0195949390

740 Franklin European Growth Fund Class N (acc) EUR LU0122612764

775 Franklin European Small-Mid Cap Growth Fund Class A (acc) EUR EUR LU0138075311

762 Franklin European Small-Mid Cap Growth Fund Class B (acc) USD USD LU0140364158

619 Franklin European Small-Mid Cap Growth Fund Class I (acc) EUR EUR LU0195949473

626 Franklin European Small-Mid Cap Growth Fund Class N (acc) EUR EUR LU0188151095

789 Franklin Global Growth Fund Class A (acc) USD LU0122613069

741 Franklin Global Growth Fund Class N (acc) USD LU0122612921

722 Franklin Global Small-Mid Cap Growth Fund Class A (acc) USD LU0144644332

723 Franklin Global Small-Mid Cap Growth Fund Class B (acc) USD LU0144647434

724 Franklin Global Small-Mid Cap Growth Fund Class N (acc) USD LU0144648085

750 Franklin High Yield Fund Class A (acc) USD LU0131126228

825 Franklin High Yield Fund Class A (dis) USD LU0065014192

864 Franklin High Yield Fund Class B (dis) USD LU0098868697

682 Franklin High Yield Fund Class C (acc) USD LU0152906094

694 Franklin High Yield Fund Class I (dis) USD LU0152908892

729 Franklin High Yield Fund Class N (acc) USD LU0109402817

751 Franklin High Yield (Euro) Fund Class A (acc) EUR LU0131126574

795 Franklin High Yield (Euro) Fund Class A (dis) EUR LU0109395268

716 Franklin High Yield (Euro) Fund Class I (acc) EUR LU0195952261

732 Franklin High Yield (Euro) Fund Class N (acc) EUR LU0122613572

839 Franklin Income Fund Class A (dis) USD LU0098860793

760 Franklin Income Fund Class B (dis) USD LU0128532388

683 Franklin Income Fund Class C (acc) USD LU0152906334

700 Franklin Income Fund Class I (acc) USD LU0195951883

850 Franklin Income Fund Class N (acc) USD LU0098864514

797 Franklin Technology Fund Class A (acc) USD USD LU0109392836

862 Franklin Technology Fund Class B (acc) USD USD LU0109734730

734 Franklin Technology Fund Class N (acc) USD USD LU0122613655

755 Franklin Technology Fund Class N (acc) EUR EUR LU0140363697

838 Franklin U.S. Equity Fund Class A (acc) USD USD LU0098860363

861 Franklin U.S. Equity Fund Class B (acc) USD USD LU0098863896

686 Franklin U.S. Equity Fund Class C (acc) USD USD LU0152907068

620 Franklin U.S. Equity Fund Class I (acc) USD USD LU0181995647

728 Franklin U.S. Equity Fund Class N (acc) USD USD LU0109402494

772 Franklin U.S. Equity Fund Class A (acc) EUR EUR LU0139291818

APPENDIX 3



602 Franklin U.S. Equity Fund Class I (acc) EUR EUR LU0195950216

756 Franklin U.S. Equity Fund Class N (acc) EUR EUR LU0139292113

812 Franklin U.S. Government Fund Class A (dis) USD USD LU0029872446

708 Franklin U.S. Government Fund Class AX (acc) USD USD LU0138076046

693 Franklin U.S. Government Fund Class B (acc) USD USD LU0152908629

863 Franklin U.S. Government Fund Class B (dis) USD USD LU0098868937

687 Franklin U.S. Government Fund Class C (acc) USD USD LU0152907142

707 Franklin U.S. Government Fund Class I (dis) USD USD LU0139222334

749 Franklin U.S. Government Fund Class N (acc) USD USD LU0128529913

847 Franklin U.S. Government Fund Class N (dis) USD USD LU0098867376

656 Franklin U.S. Growth Fund Class A (acc) USD LU0170466246

657 Franklin U.S. Growth Fund Class B (acc) USD LU0170466675

659 Franklin U.S. Growth Fund Class C (acc) USD LU0170466915

660 Franklin U.S. Growth Fund Class I (acc) USD LU0170467053

658 Franklin U.S. Growth Fund Class N (acc) USD LU0170466832

638 Franklin U.S. Short-Term Bond Fund Class A (dis) USD LU0170467566

635 Franklin U.S. Short-Term Bond Fund Class AX (acc) USD LU0170468614

637 Franklin U.S. Short-Term Bond Fund Class B (acc) USD LU0170467301

639 Franklin U.S. Short-Term Bond Fund Class B (dis) USD LU0170467723

640 Franklin U.S. Short-Term Bond Fund Class C (dis) USD LU0170468291

632 Franklin U.S. Short-Term Bond Fund Class I (acc) USD LU0195953400

641 Franklin U.S. Short-Term Bond Fund Class N (dis) USD LU0170468374

790 Franklin U.S. Small-Mid Cap Growth Fund Class A (acc) USD LU0122613226

670 Franklin U.S. Small-Mid Cap Growth Fund Class B (acc) USD LU0152927330

742 Franklin U.S. Small-Mid Cap Growth Fund Class N (acc) USD LU0122613143

642 Franklin U.S. Total Return Fund Class A (acc) USD LU0170468960

643 Franklin U.S. Total Return Fund Class A (dis) USD LU0170469265

644 Franklin U.S. Total Return Fund Class B (acc) USD LU0170469695

645 Franklin U.S. Total Return Fund Class B (dis) USD LU0170470271

647 Franklin U.S. Total Return Fund Class C (dis) USD LU0170470784

717 Franklin U.S. Total Return Fund Class I (acc) USD LU0195952345

646 Franklin U.S. Total Return Fund Class N (dis) USD LU0170470511

828 Franklin Mutual Beacon Fund Class A (acc) USD USD LU0070302665

767 Franklin Mutual Beacon Fund Class A (dis) USD USD LU0208291251

860 Franklin Mutual Beacon Fund Class B (acc) USD USD LU0098868267

684 Franklin Mutual Beacon Fund Class C (acc) USD USD LU0152906508

600 Franklin Mutual Beacon Fund Class I (acc) USD USD LU0195949986

846 Franklin Mutual Beacon Fund Class N (acc) USD USD LU0094041471

769 Franklin Mutual Beacon Fund Class A (acc) EUR EUR LU0140362707

753 Franklin Mutual Beacon Fund Class N (acc) EUR EUR LU0140362889

770 Franklin Mutual European Fund Class A (acc) EUR EUR LU0140363002

601 Franklin Mutual European Fund Class I (acc) EUR EUR LU0195950059

754 Franklin Mutual European Fund Class N (acc) EUR EUR LU0140363267

794 Franklin Mutual European Fund Class A (acc) USD USD LU0109981661

866 Franklin Mutual European Fund Class B (acc) USD USD LU0109981828

685 Franklin Mutual European Fund Class C (acc) USD USD LU0152906920

743 Franklin Mutual European Fund Class N (acc) USD USD LU0128530259



710 Franklin Templeton Global Growth and Value Fund Class A (acc) USD LU0152903588

711 Franklin Templeton Global Growth and Value Fund Class B (acc) USD LU0152904040

713 Franklin Templeton Global Growth and Value Fund Class C (acc) USD LU0152904719

714 Franklin Templeton Global Growth and Value Fund Class I (acc) USD LU0152904982

712 Franklin Templeton Global Growth and Value Fund Class N (acc) USD LU0152904479

791 Franklin Templeton Japan Fund Class A (acc) YEN JPY LU0116920520

696 Franklin Templeton Japan Fund Class N (acc) EUR EUR LU0152983168

786 Templeton Asian Growth Fund Class A (acc) USD LU0128522157

805 Templeton Asian Growth Fund Class A (dis) USD LU0029875118

621 Templeton Asian Growth Fund Class C (acc) USD LU0181998153

674 Templeton Asian Growth Fund Class N (acc) USD LU0152928064

622 Templeton Asian Growth Fund Class I (acc) USD LU0181996454

606 Templeton Asian Growth Fund Class I (acc) EUR LU0195950992

822 Templeton China Fund Class A (acc) USD LU0052750758

607 Templeton China Fund Class I (acc) USD LU0195951024

627 Templeton China Fund Class N (acc) USD LU0188151178

833 Templeton Eastern Europe Fund Class A (acc) EUR LU0078277505

608 Templeton Eastern Europe Fund Class I (acc) EUR LU0195951297

737 Templeton Eastern Europe Fund Class N (acc) EUR LU0122613903

785 Templeton Emerging Markets Fund Class A (acc) USD USD LU0128522744

806 Templeton Emerging Markets Fund Class A (dis) USD USD LU0029874905

854 Templeton Emerging Markets Fund Class B (acc) USD USD LU0098868341

689 Templeton Emerging Markets Fund Class C (acc) USD USD LU0152908033

609 Templeton Emerging Markets Fund Class I (acc) USD USD LU0195951610

727 Templeton Emerging Markets Fund Class N (acc) USD USD LU0109402221

612 Templeton Emerging Markets Fund Class N (acc) EUR EUR LU0188151921

813 Templeton Emerging Markets Bond Fund Class A (dis) USD USD LU0029876355

859 Templeton Emerging Markets Bond Fund Class B (dis) USD USD LU0099120023

688 Templeton Emerging Markets Bond Fund Class C (acc) USD USD LU0152907654

715 Templeton Emerging Markets Bond Fund Class I (acc) USD USD LU0195951966

744 Templeton Emerging Markets Bond Fund Class N (acc) USD USD LU0128530416

698 Templeton Emerging Markets Bond Fund Class A (dis) EUR EUR LU0152984307

783 Templeton Euro Liquid Reserve Fund Class A (acc) EUR LU0128517660

818 Templeton Euro Liquid Reserve Fund Class A (dis) EUR LU0052769774

745 Templeton Euro Liquid Reserve Fund Class N (acc) EUR LU0128518122

836 Templeton Euroland Fund Class A (acc) EUR LU0093666013

603 Templeton Euroland Fund Class I (acc) EUR LU0195950489

746 Templeton Euroland Fund Class N (acc) EUR LU0128521001

837 Templeton Euroland Bond Fund Class A (dis) EUR LU0093669546

633 Templeton Euroland Bond Fund Class I (acc) EUR LU0195953582

628 Templeton Euroland Bond Fund Class N (acc) EUR LU0188151251

773 Templeton European Fund Class A (acc) EUR EUR LU0139292543

604 Templeton European Fund Class I (acc) EUR EUR LU0195950646

757 Templeton European Fund Class N (acc) EUR EUR LU0139292972

782 Templeton European Fund Class A (acc) USD USD LU0128523122

809 Templeton European Fund Class A (dis) USD USD LU0029868097

736 Templeton European Fund Class N (acc) USD USD LU0122614117



648 Templeton European Total Return Fund Class A (acc) EUR LU0170473374

649 Templeton European Total Return Fund Class A (dis) EUR LU0170473531

718 Templeton European Total Return Fund Class I (acc) EUR LU0195952774

650 Templeton European Total Return Fund Class N (acc) EUR LU0170474000

779 Templeton Global Fund Class A (acc) USD LU0128525929

801 Templeton Global Fund Class A (dis) USD LU0029864427

852 Templeton Global Fund Class B (acc) USD LU0098868002

690 Templeton Global Fund Class C (acc) USD LU0152908116

701 Templeton Global Fund Class I (acc) USD LU0109395698

725 Templeton Global Fund Class N (acc) USD LU0109401686

778 Templeton Global (Euro) Fund Class A (acc) EUR LU0128520375

802 Templeton Global (Euro) Fund Class A (dis) EUR LU0029873410

629 Templeton Global (Euro) Fund Class N (acc) EUR LU0188151335

636 Templeton Global (Euro) Fund Class I (acc) EUR LU0195953749

781 Templeton Global Balanced Fund Class A (acc) USD USD LU0128525689

815 Templeton Global Balanced Fund Class A (dis) USD USD LU0052756011

867 Templeton Global Balanced Fund Class B (acc) USD USD LU0128531653

634 Templeton Global Balanced Fund Class A (acc) EUR EUR LU0195953822

758 Templeton Global Balanced Fund Class N (acc) EUR EUR LU0140420323

810 Templeton Global Bond Fund Class A (dis) USD USD LU0029871042

614 Templeton Global Bond Fund Class AX (acc) USD USD LU0188152226

761 Templeton Global Bond Fund Class B (dis) USD USD LU0128533279

623 Templeton Global Bond Fund Class C (dis) USD USD LU0181997775

624 Templeton Global Bond Fund Class I (acc) USD USD LU0181997262

735 Templeton Global Bond Fund Class N (acc) USD USD LU0122614208

675 Templeton Global Bond Fund Class A (acc) EUR EUR LU0152980495

676 Templeton Global Bond Fund Class A (dis) EUR EUR LU0152981543

720 Templeton Global Bond Fund Class I (acc) EUR EUR LU0195953079

677 Templeton Global Bond Fund Class N (acc) EUR EUR LU0152982608

679 Templeton Global Bond(Euro) Fund Class A (acc) EUR LU0170474422

680 Templeton Global Bond (Euro) Fund Class A (dis) EUR LU0170474935

719 Templeton Global Bond (Euro) Fund Class I (acc) EUR LU0195952857

631 Templeton Global Bond (Euro) Fund Class N (acc) EUR LU0170475155

777 Templeton Global Smaller Companies Fund Class A (acc) USD LU0128526141

803 Templeton Global Smaller Companies Fund Class A (dis) USD LU0029874061

605 Templeton Global Smaller Companies Fund Class I (acc) USD LU0195950729

726 Templeton Global Smaller Companies Fund Class N (acc) USD LU0109401926

651 Templeton Global Total Return Fund Class A (acc) USD LU0170475312

652 Templeton Global Total Return Fund Class A (dis) USD LU0170475585

653 Templeton Global Total Return Fund Class B (acc) USD LU0170477102

654 Templeton Global Total Return Fund Class B (dis) USD LU0170477284

721 Templeton Global Total Return Fund Class I (acc) USD LU0195953152

655 Templeton Global Total Return Fund Class N (acc) USD LU0170477797

793 Templeton Growth (Euro) Fund Class A (acc) EUR LU0114760746

613 Templeton Growth (Euro) Fund Class A (dis) EUR LU0188152069

704 Templeton Growth (Euro) Fund Class I (acc) EUR LU0114763096

731 Templeton Growth (Euro) Fund Class N (acc) EUR LU0122614380



832 Templeton Japan Fund Class A (acc) USD LU0078278065

630 Templeton Japan Fund Class N (acc) USD LU0188151418

824 Templeton Korea Fund Class A (acc) USD LU0057567074

610 Templeton Korea Fund Class N (acc) USD LU0188151509

776 Templeton Latin American Fund Class A (acc) USD LU0128526570

804 Templeton Latin America Fund Class A (dis) USD LU0029865408

842 Templeton Latin America Fund Class N (acc) USD LU0094040077

830 Templeton Thailand Fund Class A (acc) USD LU0078275988

611 Templeton Thailand Fund Class N (acc) USD LU0188151681

788 Templeton U.S. Dollar Liquid Reserve Fund Class A (acc) USD LU0128526901

817 Templeton U.S. Dollar Liquid Reserve Fund Class A (dis) USD LU0052767562

865 Templeton U.S. Dollar Liquid Reserve Fund Class B (dis) USD LU0098869075

691 Templeton U.S. Dollar Liquid Reserve Fund Class C (acc) USD LU0152908389

739 Templeton U.S. Dollar Liquid Reserve Fund Class N (acc) USD LU0122614463

664 Templeton U.S. Value Fund Class A (acc) USD LU0170478092

665 Templeton U.S. Value Fund Class B (acc) USD LU0170478332

668 Templeton U.S. Value Fund Class C (acc) USD LU0170478928

669 Templeton U.S. Value Fund Class I (acc) USD LU0170479223

667 Templeton U.S. Value Fund Class N (acc) USD LU0170478761


FRANKLIN TEMPLETON INVESTMENT FUNDSSocie¤te¤ d’investissement a' capital variable

Registered office: 26, boulevard Royal, L-2449 LuxembourgGrand Duchy of LuxembourgR.C.S. Luxembourg B 35 177 FTIF SIMP PGB 1204

Documents

Franklin Templeton Investment Funds SIMPLIFIED PROSPECTUS