May 
      1, 2009

  

    
      
The 
      SEC has not approved or disapproved these securities or passed upon the 
      adequacy of this prospectus. Any representation to the contrary is a 
      criminal offense.


  

    
      

  

    
      
Class 
      A, B, C & Advisor

    
      
PROSPECTUS

  

    
      
Templeton 
      Global Opportunities Trust

  

    Templeton

  

    
      






  
  

     
     
    
      
Contents

  

     

  

    
    
    
      
THE 
      FUND

  

    
      
INFORMATION 
      ABOUT THE FUND YOU SHOULD KNOW BEFORE INVESTING

    
    
      
Goal and Strategies
Main 
      Risks
Performance
Fees and Expenses
Management
Distributions and 
      Taxes
Financial Highlights

  

     

  

    
    
    
      
YOUR 
      ACCOUNT

  

    
      
INFORMATION 
      ABOUT SALES CHARGES, ACCOUNT TRANSACTIONS AND SERVICES

    
    
      
Choosing a Share Class
Buying 
      Shares
Investor Services
Selling Shares
Exchanging 
      Shares
Account Policies
Questions

  

     

  

    
    
    
      
FOR 
      MORE INFORMATION

  

    
      
WHERE 
      TO LEARN MORE ABOUT THE FUND

    
    
      
Back Cover

  

     








THE FUND



Goal and Strategies


Goal


The Fund's investment goal is long-term capital growth.


Main Investment 
Strategies


Under normal market conditions, the Fund invests at least 65% of its total 
assets in the equity securities of companies located anywhere in the world, 
including developing or emerging markets. The Fund may invest up to 40% of its 
net assets in securities of issuers located in developing countries or emerging 
markets. The Fund may invest in companies of any size, including smaller 
companies.


An equity security, or stock, represents a proportionate share of the 
ownership of a company. Its value is based on the success of the company's 
business, any income paid to stockholders, the value of the company's assets, 
and general market conditions. Common stocks, preferred stocks and convertible 
securities are examples of equity securities. Convertible securities generally 
are debt securities or preferred stock that may be converted into common stock 
after certain time periods under certain circumstances. The Fund also invests in 
American, European, and Global Depositary Receipts, which are certificates 
typically issued by a bank or trust company that represent securities issued by 
a foreign or domestic company. The Fund may from time to time have significant 
investments in one or more countries, and/or in particular industries or sectors 
such as materials or industrials.


The Fund may use various derivative strategies seeking to protect its assets, 
implement a cash or tax management strategy or enhance its returns. With 
derivatives, the manager attempts to predict whether an underlying investment 
will increase or decrease in value at some future time. The manager considers 
various factors, such as availability and cost, in deciding whether to use a 
particular instrument or strategy.


When choosing equity investments for this Fund, the manager applies a 
"bottom-up," value-oriented, long-term approach, focusing on the market price of 
a company's securities relative to the manager's evaluation of the company's 
long-term earnings, asset value and cash flow potential. The manager also 
considers a company's price/earnings ratio, profit margins and liquidation 
value.





The Fund invests primarily in a portfolio of global equity 
securities.




Temporary 
Investments


When the manager believes market or economic conditions are unfavorable for 
investors, the manager may invest up to 100% of the Fund's assets in a temporary 
defensive manner by holding all or a substantial portion of its assets in cash, 
cash equivalents or other high quality short-term investments. Temporary 
defensive investments generally may include money market securities (including 
shares of money market funds managed by affiliates of the manager), short-term 
U.S. and foreign government securities, short-term corporate obligations, bank 
obligations, and repurchase agreements denominated in the currency of any 
nation. The manager also may invest in these types of securities or hold cash 
while looking for suitable investment opportunities or to maintain liquidity. In 
these circumstances, the Fund may be unable to achieve its investment 
goal.



Main Risks





Because the securities the Fund holds fluctuate in price, the value of your 
investment in the Fund will go up and down. You could lose 
money.




Stocks


Although this may not be the case in foreign markets, in the U.S., stocks 
historically have outperformed other types of investments over the long term. 
Individual stock prices, however, tend to go up and down more dramatically. 
These price movements may result from factors affecting individual companies or 
industries, or the securities market as a whole. A slower-growth or recessionary 
economic environment could have an adverse effect on the price of the various 
stocks held by the Fund.


Foreign 
Securities


Investing in foreign securities, including depositary receipts, typically 
involves more risks than investing in U.S. securities. Certain of these risks 
also may apply to securities of U.S. companies with significant foreign 
operations. These risks can increase the potential for losses in the Fund and 
affect its share price.


Currency exchange rates.   Foreign 
securities may be issued and traded in foreign currencies. As a result, their 
values may be affected by changes in exchange rates between foreign currencies 
and the U.S. dollar, as well as between currencies of countries other than the 
U.S. For example, if the value of the U.S. dollar goes up compared to a foreign 
currency, an investment traded in that foreign currency will go down in value 
because it will be worth fewer U.S. dollars. From time to time, the Fund may 
employ various strategies to hedge its exposure to a particular currency, but 
there is no assurance that any such hedging strategies will be employed or that, 
if employed, they will reduce rather than increase the Fund's risk.


Political and economic developments. 
  The political, economic and social structures of some foreign countries 
may be less stable and more volatile than those in the U.S. Investments in these 
countries may be subject to the risks of internal and external conflicts, 
currency devaluations, foreign ownership limitations and tax increases. It is 
possible that a government may take over the assets or operations of a company 
or impose restrictions on the exchange or export of currency or other assets. 
Some countries also may have different legal systems that may make it difficult 
for the Fund to vote proxies, exercise shareholder rights, and pursue legal 
remedies with respect to its foreign investments. Diplomatic and political 
developments, including rapid and adverse political changes, social instability, 
regional conflicts, terrorism and war, could affect the economies, industries 
and securities and currency markets, and the value of the Fund’s investments, in 
non-U.S. countries. These factors are extremely difficult, if not impossible, to 
predict and take into account with respect to the Fund’s investments.


Trading practices.   Brokerage 
commissions and other fees generally are higher for foreign securities. 
Government supervision and regulation of foreign stock exchanges, currency 
markets, trading systems and brokers may be less than in the U.S. The procedures 
and rules governing foreign transactions and custody (holding of the Fund's 
assets) also may involve delays in payment, delivery or recovery of money or 
investments.


Availability of information.   
Foreign companies may not be subject to the same disclosure, accounting, 
auditing and financial reporting standards and practices as U.S. companies. 
Thus, there may be less information publicly available about foreign companies 
than about most U.S. companies.


Limited markets.   Certain foreign 
securities may be less liquid (harder to sell) and their prices may be more 
volatile than many U.S. securities. This means the Fund may at times be unable 
to sell foreign securities at favorable prices.


Emerging markets.   The risks of 
foreign investments typically are greater in less developed countries, sometimes 
referred to as emerging markets. For example, political and economic structures 
in these countries may be less established and may change rapidly. These 
countries also are more likely to experience high levels of inflation, deflation 
or currency devaluation, which can harm their economies and securities markets 
and increase volatility. In fact, short-term volatility in these markets and 
declines of 50% or more are not uncommon. Restrictions on currency trading that 
may be imposed by emerging market countries will have an adverse effect on the 
value of the securities of companies that trade or operate in such 
countries.


Smaller 
Companies


While smaller companies may offer substantial opportunities for capital 
growth, they also involve substantial risks and should be considered 
speculative. Historically, smaller company securities have been more volatile in 
price than larger company securities, especially over the short term. Among the 
reasons for the greater price volatility are the less certain growth prospects 
of smaller companies, the lower degree of liquidity in the markets for such 
securities, and the greater sensitivity of smaller companies to changing 
economic conditions.


In addition, smaller companies may lack depth of management, be unable to 
generate funds necessary for growth or development, or be developing or 
marketing new products or services for which markets are not yet established and 
may never become established.


Derivative 
Securities


The performance of derivative investments depends, at least in part, on the 
performance of an underlying asset. Derivative securities involve costs, may be 
volatile, and may involve a small investment relative to the risk assumed. Their 
successful use will depend on the manager's ability to predict market movements. 
Risks include delivery failure, default by the other party or the inability to 
close out a position because the trading market becomes illiquid.


Country, Sector or 
Industry Focus


To the extent the Fund invests a significant portion of its assets in one or 
more countries, sectors or industries at any time, the Fund will face a greater 
risk of loss due to factors affecting a single country, sector or industry than 
if the Fund always maintained wide diversity among the countries, sectors and 
industries in which it invests. For example, banks and financial institutions 
are subject to potentially restrictive governmental controls and regulations 
that may limit or adversely affect profitability and share price. In addition, 
securities in that sector may be very sensitive to interest rate changes 
throughout the world.


Liquidity


The Fund may invest up to 15% of its net assets in securities with a limited 
trading market. Reduced liquidity may have an adverse impact on market price and 
the Fund's ability to sell particular securities when necessary to meet the 
Fund's liquidity needs or in response to a specific economic event.


More detailed information about the Fund, its policies and risks can be found 
in the Fund's Statement of Additional Information (SAI).


A description of the Fund's policies and procedures regarding the release of 
portfolio holdings information is also available in the Fund's SAI. Portfolio 
holdings information can be viewed online at franklintempleton.com.





Mutual fund shares are not deposits or obligations of, or guaranteed or 
endorsed by, any bank, and are not insured by the Federal Deposit Insurance 
Corporation, the Federal Reserve Board, or any other agency of the U.S. 
government. Mutual fund shares involve investment risks, including the possible 
loss of principal.





Performance


This bar chart and table show the volatility of the Fund's returns, which is 
one indicator of the risks of investing in the Fund. The bar chart shows changes 
in the Fund's returns from year to year over the calendar years shown. The table 
shows how the Fund's average annual total returns compare to those of a 
broad-based securities market index. Of course, past performance (before or 
after taxes) cannot predict or guarantee future results. All Fund performance 
assumes reinvestment of dividends and capital gains.


CLASS A ANNUAL TOTAL 
RETURNS1


 





  
  

    Best 
    Quarter: 
    Q2'03 
    21.91% 

  

    Worst 
    Quarter: 
    Q4'08 
    -21.83% 







  
  

    AVERAGE ANNUAL TOTAL RETURNS
    For the periods ended December 31, 
  2008



  
  

       
    1 
      Year 
    5 
      Years 
    10 
      Years 

  

    Templeton Global 
      Opportunities Trust - Class A2 
     
     
     

  

    Return Before 
      Taxes 
    -45.85% 
    1.32% 
    2.50% 

  

    Return After Taxes 
      on Distributions 
    -46.18% 
    0.88% 
    1.75% 

  

    Return After Taxes 
      on Distributions and Sale of Fund Shares 
    -29.14% 
    1.43% 
    2.10% 

  

    MSCI All Country 
      World Index3 
    -41.85% 
    0.44% 
    0.23% 




(indices reflect no 
deduction for fees, expenses, or taxes)




  
  

       
    1 
      Year 
    5 
      Years 
    10 
      Years 

  

    Templeton Global 
      Opportunities Trust - Class B2 
    -45.16% 
    1.41% 
    2.54% 

  

    MSCI All Country 
      World Index3 
    -41.85% 
    0.44% 
    0.23% 





  
  

       
    1 
      Year 
    5 
      Years 
    10 
      Years 

  

    Templeton Global 
      Opportunities Trust - Class C2 
    -43.51% 
    1.77% 
    2.35% 

  

    MSCI All Country 
      World Index3 
    -41.85% 
    0.44% 
    0.23% 





  
  

       
    1 
      Year 
    5 
      Years 
    10 
      Years 

  

    Templeton Global 
      Opportunities Trust - Advisor Class4 
    -45.85% 
    1.32% 
    2.50% 

  

    MSCI All Country 
      World Index3 
    -41.85% 
    0.44% 
    0.23% 




After-tax returns are calculated using the historical highest individual 
federal marginal income tax rates and do not reflect the impact of state and 
local taxes. Your actual after-tax returns depend on your particular tax 
situation and may differ from those shown.


These after-tax return figures do not apply to you if you hold your Fund 
shares through a tax-deferred arrangement such as a 401(k) plan or individual 
retirement account. The Fund's past performance, before and after taxes, is not 
necessarily an indication of how it will perform in the future.


After-tax returns are shown only for Class A; after-tax returns for other 
classes of shares will vary.


1. Figures do not 
reflect sales charges. If they did, returns would be lower. As of March 31, 
2009, the Fund's year-to-date return was -10.28% for Class A.


2. Figures reflect sales 
charges.


3. Source: © 2009 
Morningstar. The unmanaged Morgan Stanley Capital International All Country 
(MSCI AC) World Index is a free float-adjusted, market capitalization-weighted 
index designed to measure equity market performance in global developed and 
emerging markets. It includes reinvested dividends. One cannot invest directly 
in an index, nor is an index representative of the Fund's portfolio.


4. Effective May 1, 
2009, the Fund began offering Advisor Class shares, which do not have sales 
charges or a Rule 12b-1 plan. Performance quotations for this class reflect the 
following methods of calculation: (a) for periods prior to May 1, 2009, a 
restated figure is used based on the Fund’s Class A performance, excluding the 
effect of Class A’s maximum initial sales charge but reflecting the effect of 
the Class A Rule 12b-1 fees; and (b) for periods after May 1, 2009, actual 
Advisor Class performance is used reflecting all charges and fees applicable to 
that class.



Fees and Expenses


This table describes the fees and expenses that you may pay if you buy and 
hold shares of the Fund.




  
  

    SHAREHOLDER FEES
    (fees paid directly from your 
  investment)



  
  

       
    Class A 
    Class B1 
    Class C 
    Advisor Class2 

  

    Maximum sales 
      charge (load) as a percentage of offering price 
    5.75%3 
    4.00% 
    1.00% 
    None 

  

        
       Load imposed on purchases 
    5.75%3 
    None 
    None 
    None 

  

        
       Maximum deferred sales charge (load) 
    None4 
    4.00%5 
    1.00% 
    None 




1. New or additional 
investments into Class B are no longer permitted. Existing shareholders of Class 
B shares may continue as Class B shareholders, continue to reinvest dividends 
into Class B shares and exchange their Class B shares for Class B shares of 
other Franklin Templeton funds as permitted by the current exchange 
privileges.


2. The Fund began 
offering Advisor Class shares on May 1, 2009. Total annual Fund operating 
expenses are based on the expenses for Class A, B, and C for the fiscal year 
ended December 31, 2008.


3. The dollar amount of 
the sales charge is the difference between the offering price of the shares 
purchased (which factors in the applicable sales charge in this table) and the 
net asset value of those shares. Since the offering price is calculated to two 
decimal places using standard rounding criteria, the number of shares purchased 
and the dollar amount of the sales charge as a percentage of the offering price 
and of your net investment may be higher or lower depending on whether there was 
a downward or upward rounding.


4. There is a 1% 
contingent deferred sales charge that applies to investments of $1 million or 
more (see "Sales Charges-Class A" under "Choosing a Share Class") and purchases 
by certain retirement plans without an initial sales charge.


5. Declines to zero 
after six years.



Please see "Choosing a Share Class" for an explanation of how and when these 
sales charges apply.




  
  

    ANNUAL FUND OPERATING EXPENSES1
    (expenses deducted from Fund 
assets)



  
  

       
    Class A 
    Class B2 
    Class C 
    Advisor Class3 

  

     
     
     
     
     

  

    Management 
    fees 
    0.75% 
    0.75% 
    0.75% 
    0.75% 

  

    Distribution and 
      service (12b-1) fees 
    0.25% 
    1.00% 
    0.99% 
    None 

  

    Other 
    expenses 
    0.34% 
    0.34% 
    0.34% 
    0.34% 

  

    Total annual Fund 
      operating expenses 
    1.34% 
    2.09% 
    2.08% 
    1.09% 




1. In periods of market 
volatility, during which assets may fluctuate substantially, the Fund's annual 
Fund operating expenses may vary from the numbers shown in the table above.


2. New or additional 
investments into Class B are no longer permitted. Existing shareholders of Class 
B shares may continue as Class B shareholders, continue to reinvest dividends 
into Class B shares and exchange their Class B shares for Class B shares of 
other Franklin Templeton funds as permitted by the current exchange 
privileges.


3. The Fund began 
offering Advisor Class shares on May 1, 2009. Total annual Fund operating 
expenses are based on the expenses for Class A, B, and C for the fiscal year 
ended December 31, 2008.



Example


This example can help you compare the cost of investing in the Fund with the 
cost of investing in other mutual funds. It assumes:



Although your actual costs may be higher or lower, based on these assumptions 
your costs would be:



  
  

       
    1 
      Year 
    3 
      Years 
    5 
      Years 
    10 
      Years 

  

    If you sell your shares at the end of the 
      period: 

  

    Class A   
    $ 
      7041 
    $ 
      975 
    $ 
      1,267 
    $ 
      2,095 

  

    Class B   
    $ 
      612 
    $ 
      955 
    $ 
      1,324 
    $ 
      2,2292 

  

    Class C   
    $ 
      311 
    $ 
      652 
    $ 
      1,119 
    $ 
      2,410 

  

    Advisor Class   
    $ 
      111 
    $ 
      347 
    $ 
      601 
    $ 
      1,329 

  

    If you do not sell your shares: 

  

    Class B   
    $ 
      212 
    $ 
      655 
    $ 
      1,124 
    $ 
      2,2292 

  

    Class C   
    $ 
      211 
    $ 
      652 
    $ 
      1,119 
    $ 
      2,410 




1. Assumes a contingent 
deferred sales charge will not apply.


2. Assumes conversion of 
Class B shares to Class A shares after eight years, lowering your annual 
expenses from that time on.



Management


Templeton Investment Counsel, LLC (Investment Counsel), 500 East Broward 
Blvd., Fort Lauderdale, Florida 33394-3091, is the Fund's investment manager. 
Together, Investment Counsel and its affiliates manage over $391 billion in 
assets.


Under an agreement with Investment Counsel, Franklin Templeton Investments 
(Asia) Limited (FTIA), 17th Floor, Chater House, 8 Connaught Road Central, Hong 
Kong, is the Fund's sub-advisor. FTIA provides Investment Counsel with 
investment management advice and assistance.


The Fund is managed by a team of dedicated professionals focused on 
investments in developing or emerging markets. The portfolio managers of the 
team are as follows:


GUANG 
YANG, CFA   Executive Vice President of Investment Counsel


Mr. Yang has been lead portfolio 
manager of the Fund since 2001. He has primary responsibility for the 
investments of the Fund. Mr. Yang has final authority over all aspects of the 
Fund's investment portfolio, including but not limited to, purchases and sales 
of individual securities, portfolio risk assessment, and the management of daily 
cash balances in accordance with anticipated management requirements. The degree 
to which he may perform these functions, and the nature of these functions, may 
change from time to time. Mr. Yang joined Franklin Templeton Investments in 
1995.


TINA 
SADLER, CFA   Vice President / Portfolio Manager - Research Analyst 
of Investment Counsel


Ms. Sadler has been a portfolio 
manager of the Fund since 2004, providing research and advice on the purchases 
and sales of individual securities, and portfolio risk assessment. Ms. Sadler 
joined Franklin Templeton Investments in 1997.


PETER 
A. NORI, CFA   Executive Vice President/Portfolio Manager - Research 
Analyst of Investment Counsel


Mr. Nori has been a portfolio 
manager of the Fund since 2004, providing research and advice on the purchases 
and sales of individual securities, and portfolio risk assessment. Mr. Nori 
joined Franklin Templeton Investments in 1987.


CFA® and Chartered Financial 
Analyst® are trademarks owned by CFA Institute.


The Fund’s SAI provides additional information about portfolio manager 
compensation, other accounts that they manage and their ownership of Fund 
shares.


The Fund pays Investment Counsel a fee for managing the Fund's assets. For 
the fiscal year ended December 31, 2008, the Fund paid 0.75% of its average 
daily net assets to the manager for its services.
A discussion regarding the 
basis for the board of trustees approving the investment management contract of 
the Fund is available in the Fund's semiannual report to shareholders for the 
six-month period ended June 30. 

In 2003 and 2004, multiple lawsuits were filed against Franklin Resources, 
Inc., and certain of its investment advisor subsidiaries, among other 
defendants, alleging violations of federal securities and state laws and 
seeking, among other relief, monetary damages, restitution, removal of fund 
trustees, directors, investment managers, administrators and distributors, 
rescission of management contracts and 12b-1 plans, and/or attorneys’ fees and 
costs. Specifically, the lawsuits claim breach of duty with respect to alleged 
arrangements to permit market timing and/or late trading activity, or breach of 
duty with respect to the valuation of the portfolio securities of certain 
Templeton funds managed by Franklin Resources, Inc. subsidiaries, allegedly 
resulting in market timing activity. The lawsuits are styled as class actions, 
or derivative actions on behalf of either the named funds or Franklin Resources, 
Inc., and have been consolidated for pretrial purposes, along with hundreds of 
other similar lawsuits against other mutual fund companies. All of the Franklin 
Templeton Investments mutual funds that were named in the litigation as 
defendants have since been dismissed, as have the independent trustees to those 
funds.


Franklin Resources, Inc. previously disclosed these private lawsuits in its 
regulatory filings and on its public website. Any material updates regarding 
these matters will be disclosed in Franklin Resources, Inc.’s Form 10-Q or Form 
10-K filings with the U.S. Securities and Exchange Commission.



Distributions and Taxes


Income and Capital 
Gain Distributions


The Fund has qualified to be treated as a regulated investment company under 
the Internal Revenue Code (Code). As a regulated investment company, the Fund 
generally pays no federal income tax on the income and gains it distributes to 
you. The Fund intends to make a distribution from its net investment income at 
least twice each calendar year. Capital gains, if any, may be distributed at 
least annually. The amount of any distribution will vary, and there is no 
guarantee the Fund will pay either income dividends or a capital gain 
distribution. Your income dividends and capital gain distribution will be 
automatically reinvested in additional shares at net asset value (NAV) unless 
you elect to receive cash payments.


Annual statements.   Shortly after 
the end of each calendar year, you will receive a statement that shows the tax 
status of distributions you received the previous year, including, for U.S. 
investors, the amount of any qualified dividend income subject to tax at capital 
gains rates, and, for non-U.S. investors, the amount of your ordinary dividends 
that are exempt from nonresident alien withholding taxes because they are 
interest-related or short-term capital gain dividends. Distributions declared in 
December but paid in January are taxable as if they were paid in December.


The Fund may at times find it necessary to reclassify income after it issues 
your tax reporting statement. This can result from rules in the Code that 
effectively prevent regulated investment companies such as the Fund from 
ascertaining with certainty until after the calendar year end the final amount 
and character of distributions the Fund has received on its investments during 
the prior calendar year. Prior to issuing your statement, Franklin Templeton 
Investments makes every effort to identify reclassifications of income to reduce 
the number of corrected forms mailed to shareholders. However, when necessary, 
the Fund will send you a corrected tax reporting statement to reflect 
reclassified information. If you receive a corrected tax reporting statement, 
use the information on this statement, and not the information on your original 
statement, in completing your tax returns.


Avoid "buying a dividend."   If you 
invest in the Fund shortly before it makes a distribution, you may receive some 
of your investment back in the form of a taxable distribution. For example, if 
you buy 500 shares in the Fund on December 10th at the Fund's NAV of $10 per 
share, and the Fund makes a distribution on December 15th of $1 per share, your 
shares will then have an NAV of $9 per share (disregarding any change in the 
Fund's market value), and you will have to pay a tax on what is essentially a 
return of your investment of $1 per share. This tax treatment is required even 
if you reinvest the $1 per share distribution in additional Fund shares.


Tax 
Considerations


In general, if you are a taxable investor, Fund distributions are taxable to 
you at either ordinary income or capital gains tax rates. This is true whether 
you reinvest your distributions in additional Fund shares or receive them in 
cash.


Dividend income.   A portion of the 
income dividends paid to you by the Fund may be qualified dividends subject to 
taxation at the long-term capital gain rates. In general, income dividends from 
portfolio investments in the stock of domestic corporations and qualified 
foreign corporations are permitted this favored federal tax treatment. Income 
dividends from interest earned by the Fund on debt securities and dividends 
received from unqualified foreign corporations continue to be taxed at the 
higher ordinary income tax rates. Distributions of qualified dividends are 
eligible for these reduced rates of taxation only if you own your shares for at 
least 61 days during the 121-day period beginning 60 days before the ex-dividend 
date of any dividend. The reduced rates of taxation on qualified dividends are 
scheduled to sunset on December 31, 2010, unless extended or made permanent 
before that date.


Distributions of capital gains.   
Fund distributions of short-term capital gains are taxable to you as ordinary 
income. Fund distributions of long-term capital gains are taxable as long-term 
capital gains no matter how long you have owned your shares. Long-term capital 
gain distributions to individuals qualify for the 15% tax rate. For individuals 
in the 10% and 15% tax brackets, the tax rate is 0% on distributions of net 
capital gains realized by the Fund or on net capital gains that you realize on 
the sale of your Fund shares in calendar years 2008 through 2010. These reduced 
rates of taxation of capital gain dividends and net long-term capital gains are 
scheduled to sunset on December 31, 2010, unless extended or made permanent 
before that date.


Sales of Fund shares.   When you sell 
your shares in the Fund, you may realize a capital gain or loss. For tax 
purposes, an exchange of your Fund shares for shares of a different Franklin 
Templeton fund is the same as a sale, and will normally generate a gain or loss 
that will be reported to you in your year-end tax information. For multiclass 
funds, an exchange of your shares in one class in the Fund for shares of another 
class in the same Fund is not a taxable event, and no gain or loss will 
be reported on such a transaction.


If you have owned your Fund shares for more than one year, any gains 
reportable on the sale of your shares will also qualify for the reduced rates of 
taxation on capital gains as discussed above.


Backup withholding.   If you do not 
provide the Fund with your proper taxpayer identification number and certain 
required certifications, you may be subject to backup withholding at a rate of 
28% on any distributions of income, capital gains or proceeds from the sale of 
your shares. The Fund also must withhold if the Internal Revenue Service (IRS) 
instructs it to do so.


State, local and foreign taxes.   
Distributions of ordinary income and capital gains, if any, and gains from the 
sale of your Fund shares generally are subject to state and local taxes. If the 
Fund qualifies to pass through to you the tax benefits from foreign taxes it 
pays on its investments, and elects to do so, then any foreign taxes it pays on 
these investments may be passed through to you as a foreign tax credit.


Non-U.S. investors.   Non-U.S. 
investors may be subject to a U.S. withholding tax at a 30% or lower treaty rate 
on all Fund dividends of ordinary income. Non-U.S. investors may also be subject 
to U.S. estate tax on their investment in the Fund. They also have special 
certification requirements that, if not met, can subject them to backup 
withholding on any dividends, distributions and redemption proceeds that they 
receive from the Fund. Each of these subjects is discussed in greater detail in 
the “Distributions and Taxes – Non-U.S. investors” section of the SAI.


Exemptions from withholding of U.S. tax are currently provided for the 
following distributions when paid by the Fund to nonresident alien 
investors:



Other tax information.   This 
discussion of "Distributions and Taxes" is not written to provide you with tax 
advice, and does not purport to deal with all of the tax consequences that may 
be applicable to your investment in the Fund. You should consult your own tax 
advisor regarding your particular circumstances before making an investment in 
the Fund, or about the federal, state, local and foreign tax consequences of 
your investment in the Fund.



Financial Highlights


These tables present the Fund's financial performance for the past five years 
or since its inception. Certain information reflects financial results for a 
single Fund share. The total returns in the table represent the rate that an 
investor would have earned or lost on an investment in the Fund assuming 
reinvestment of dividends and capital gains. This information has been derived 
from the financial statements audited by PricewaterhouseCoopers LLP, whose 
report, along with the Fund's financial statements, are included in the annual 
report, which is available upon request.



  
  

    CLASS A 
    Year Ended December 
    31, 

  

       
    2008 
    2007 
    2006 
    2005 
    2004 

  

    Per 
      share operating performance
(for a share outstanding 
      throughout the year)   		
       
       
       
       
       

  

    Net asset value, 
      beginning of year 
    $ 23.55 
    $ 20.49 
    $ 16.83 
    $ 15.65 
    $ 13.81 

  

    Income from 
      investment operations:a 
     
     
     
     
     

  

        
       Net investment incomeb 
    0.30 
    0.30 
    0.16 
    0.19 
    0.17 

  

        
       Net realized and unrealized gains (losses) 
    -10.17 
    3.25 
    4.48 
    1.78 
    2.10 

  

    Total from 
      investment operations 
    -9.87 
    3.55 
    4.64 
    1.97 
    2.27 

  

    Less distributions 
      from: 
     
     
     
     
     

  

        
       Net investment income 
    -0.25 
    -0.22 
    -0.16 
    -0.19 
    -0.18 

  

        
       Net realized gains 
    -0.49 
    -0.27 
    -0.82 
    -0.60 
    -0.25 

  

    Total 
      distributions 
    -0.74 
    -0.49 
    -0.98 
    -0.79 
    -0.43 

  

    Redemption 
      feesc, d 
    — 
    — 
    — 
    — 
    — 

  

    Net asset value, 
      end of year 
    $ 
      12.94 
    $ 
      23.55 
    $ 
      20.49 
    $ 
      16.83 
    $ 
      15.65 

  

    

  

    Total 
      returne 
    -42.54% 
    17.44% 
    27.87% 
    12.63% 
    16.55% 

  

    

  

    Ratios to average net assets   
       
       
       
       
       

  

    Expensesf 
    1.34% 
    1.30% 
    1.40% 
    1.38% 
    1.42% 

  

    Net investment 
      income 
    1.59% 
    1.30% 
    0.85% 
    1.20% 
    1.17% 

  

    

  

    Supplemental data   
       
       
       
       
       

  

    Net assets, end of 
      year (000’s) 
    $ 648,175 
    $ 1,148,008 
    $ 522,313 
    $ 378,507 
    $ 374,648 

  

    Portfolio turnover 
      rate 
    12.22% 
    9.14% 
    9.54% 
    10.24% 
    10.35% 




a. The amount shown for 
a share outstanding throughout the period may not correlate with the Statement 
of Operations in the annual report for the period due to the timing of sales and 
repurchases of the Fund shares in relation to income earned and/or fluctuating 
market value of the investments of the Fund.


b. Based on average 
daily shares outstanding.


c. Effective September 
1, 2008, the redemption fee was eliminated.


d. Amount rounds to less 
than $0.01 per share.


e. Total return does not 
reflect sales commissions or contingent deferred sales charges, if 
applicable.


f. Benefit of expense 
reduction rounds to less than 0.01%.



  
  

    CLASS B 
    Year Ended December 
    31, 

  

       
    2008 
    2007 
    2006 
    2005 
    2004 

  

    Per 
      share operating performance
(for a share outstanding 
      throughout the year)   		
       
       
       
       
       

  

    Net asset value, 
      beginning of year 
    $ 23.26 
    $ 20.28 
    $ 16.69 
    $ 15.53 
    $ 13.72 

  

    Income from 
      investment operations:a 
     
     
     
     
     

  

        
       Net investment incomeb 
    0.16 
    0.14 
    0.02 
    0.08 
    0.07 

  

        
       Net realized and unrealized gains (losses) 
    -10.00 
    3.20 
    4.42 
    1.75 
    2.07 

  

    Total from 
      investment operations 
    -9.84 
    3.34 
    4.44 
    1.83 
    2.14 

  

    Less distributions 
      from: 
     
     
     
     
     

  

        
       Net investment income 
    -0.10 
    -0.09 
    -0.03 
    -0.07 
    -0.08 

  

        
       Net realized gains 
    -0.49 
    -0.27 
    -0.82 
    -0.60 
    -0.25 

  

    Total 
      distributions 
    -0.59 
    -0.36 
    -0.85 
    -0.67 
    -0.33 

  

    Redemption 
      feesc, d 
    — 
    — 
    — 
    — 
    — 

  

    Net asset value, 
      end of year 
    $ 
      12.83 
    $ 
      23.26 
    $ 
      20.28 
    $ 
      16.69 
    $ 
      15.53 

  

    

  

    Total 
      returne 
    -42.95% 
    16.56% 
    26.89% 
    11.80% 
    15.69% 

  

    

  

    Ratios to average net assets   
       
       
       
       
       

  

    Expensesf 
    2.09% 
    2.05% 
    2.14% 
    2.13% 
    2.17% 

  

    Net investment 
      income 
    0.84% 
    0.55% 
    0.11% 
    0.45% 
    0.42% 

  

    

  

    Supplemental data   
       
       
       
       
       

  

    Net assets, end of 
      year (000’s) 
    $ 2,708 
    $ 4,734 
    $ 2,873 
    $ 2,069 
    $ 1,958 

  

    Portfolio turnover 
      rate 
    12.22% 
    9.14% 
    9.54% 
    10.24% 
    10.35% 




a. The amount shown for 
a share outstanding throughout the period may not correlate with the Statement 
of Operations in the annual report for the period due to the timing of sales and 
repurchases of the Fund shares in relation to income earned and/or fluctuating 
market value of the investments of the Fund.


b. Based on average 
daily shares outstanding.


c. Effective September 
1, 2008, the redemption fee was eliminated.


d. Amount rounds to less 
than $0.01 per share.


e. Total return does not 
reflect sales commissions or contingent deferred sales charges, if 
applicable.


f. Benefit of expense 
reduction rounds to less than 0.01%.



  
  

    CLASS C 
    Year Ended December 
    31, 

  

       
    2008 
    2007 
    2006 
    2005 
    2004 

  

    Per 
      share operating performance
(for a share outstanding 
      throughout the year)   		
       
       
       
       
       

  

    Net asset value, 
      beginning of year 
    $ 23.18 
    $ 20.21 
    $ 16.63 
    $ 15.48 
    $ 13.66 

  

    Income from 
      investment operations:a 
     
     
     
     
     

  

        
       Net investment incomeb 
    0.16 
    0.14 
    0.02 
    0.07 
    0.06 

  

        
       Net realized and unrealized gains (losses) 
    -9.97 
    3.19 
    4.41 
    1.75 
    2.08 

  

    Total from 
      investment operations 
    -9.81 
    3.33 
    4.43 
    1.82 
    2.14 

  

    Less distributions 
      from: 
     
     
     
     
     

  

        
       Net investment income 
    -0.14 
    -0.09 
    -0.03 
    -0.07 
    -0.07 

  

        
       Net realized gains 
    -0.49 
    -0.27 
    -0.82 
    -0.60 
    -0.25 

  

    Total 
      distributions 
    -0.63 
    -0.36 
    -0.85 
    -0.67 
    -0.32 

  

    Redemption 
      feesc, d 
    — 
    — 
    — 
    — 
    — 

  

    Net asset value, 
      end of year 
    $ 
      12.74 
    $ 
      23.18 
    $ 
      20.21 
    $ 
      16.63 
    $ 
      15.48 

  

    

  

    Total 
      returne 
    -42.96% 
    16.60% 
    26.86% 
    11.79% 
    15.74% 

  

    

  

    Ratios to average net assets   
       
       
       
       
       

  

    Expensesf 
    2.08% 
    2.05% 
    2.15% 
    2.13% 
    2.17% 

  

    Net investment 
      income 
    0.85% 
    0.55% 
    0.10% 
    0.45% 
    0.42% 

  

    

  

    Supplemental data   
       
       
       
       
       

  

    Net assets, end of 
      year (000’s) 
    $ 34,474 
    $ 47,010 
    $ 26,755 
    $ 19,127 
    $ 18,252 

  

    Portfolio turnover 
      rate 
    12.22% 
    9.14% 
    9.54% 
    10.24% 
    10.35% 




a. The amount shown for 
a share outstanding throughout the period may not correlate with the Statement 
of Operations in the annual report for the period due to the timing of sales and 
repurchases of the Fund shares in relation to income earned and/or fluctuating 
market value of the investments of the Fund.


b. Based on average 
daily shares outstanding.


c. Effective September 
1, 2008, the redemption fee was eliminated.


d. Amount rounds to less 
than $0.01 per share.


e. Total return does not 
reflect sales commissions or contingent deferred sales charges, if 
applicable.


f. Benefit of expense 
reduction rounds to less than 0.01%.



YOUR 
ACCOUNT
The board of trustees has approved the termination of offering 
Class B shares. Existing shareholders of Class B shares may continue as Class B 
shareholders, continue to reinvest dividends into Class B shares and exchange 
their Class B shares for Class B shares of other Franklin Templeton funds as 
permitted by the current exchange privileges. New or additional investments into 
Class B are not permitted. For Class B shares outstanding on February 28, 2005 
and Class B shares acquired upon reinvestment of dividends, all Class B share 
attributes, including the associated Rule 12b-1 fee, contingent deferred sales 
charge and conversion features, will continue.


Choosing a Share Class


Each class has its own sales charge and expense structure, allowing you to 
choose the class that best meets your situation. Your investment representative 
can help you decide. Investors may purchase Class C shares only for Fund 
accounts on which they have appointed an investment representative (financial 
advisor) of record. Investors who have not appointed an investment 
representative (financial advisor) to existing Class C share Fund accounts, may 
not make additional purchases to those accounts but may exchange their shares to 
a Franklin Templeton fund that offers Class C shares. Dividend and capital gain 
distributions may continue to be reinvested in existing Class B or Class C share 
Fund accounts. These provisions do not apply to Employer Sponsored Retirement 
Plans.



  
  

    Class 
    A 
    Class C 
    Advisor Class 

  

    Initial 
      sales charge of 5.75% or less 
    No 
      initial sales charge 
    See 
      "Qualified Investors - Advisor Class" below 

  

    Deferred sales charge of 1% on purchases of $1 million or more 
      sold within 18 months 
    Deferred sales charge of 1% on shares you sell within 12 
    months 
     

  

    Lower 
      annual expenses than Class C due to lower distribution fees 
    Higher 
      annual expenses than Class A due to higher distribution fees 
     




The Fund began offering Advisor Class shares on 
May 1, 2009.


Class A, B & 
C



  
  

    SALES 
      CHARGES - Class A 
     
     

  

    when 
      you invest this amount 
    the 
      sales charge makes up this % of the offering price1 
    which 
      equals this % of your net investment1 

  

    Under 
      $50,000 
    5.75 
    6.10 

  

    $50,000 
      but under $100,000 
    4.50 
    4.71 

  

    $100,000 but under $250,000 
    3.50 
    3.63 

  

    $250,000 but under $500,000 
    2.50 
    2.56 

  

    $500,000 but under $1 million 
    2.00 
    2.04 




1. The dollar amount of 
the sales charge is the difference between the offering price of the shares 
purchased (which factors in the applicable sales charge in this table) and the 
net asset value of those shares. Since the offering price is calculated to two 
decimal places using standard rounding criteria, the number of shares purchased 
and the dollar amount of the sales charge as a percentage of the offering price 
and of your net investment may be higher or lower depending on whether there was 
a downward or upward rounding.


Sales Charge 
Reductions and Waivers


Quantity discounts.   We offer two 
ways for you to combine your current purchase of Class A Fund shares with other 
existing Franklin Templeton fund share holdings that might enable you to qualify 
for a lower sales charge with your current purchase. You can qualify for a lower 
sales charge when you reach certain "sales charge breakpoints." This quantity 
discount information is also available free of charge at 
www.franklintempleton.com/retail/jsp_cm/fund_perf/pub/quantity_discount.jsp. 
This web page can also be reached at franklintempleton.com by clicking the 
"Funds & Performance" tab and then choosing "Quantity Discounts."


1. Cumulative quantity discount - lets you combine certain existing 
holdings of Franklin Templeton fund shares - referred to as "cumulative quantity 
discount eligible shares" - with your current purchase of Class A shares to 
determine if you qualify for a sales charge breakpoint.


Cumulative quantity discount eligible shares are Franklin Templeton fund 
shares registered to (or held by a financial intermediary for):



Franklin Templeton fund shares held through an administrator or 
trustee/custodian of an Employer Sponsored Retirement Plan such as a 401(k) plan 
(see definition below) do not qualify for a cumulative quantity discount.


Franklin Templeton fund assets held in multiple Employer Sponsored Retirement 
Plans may be combined in order to qualify for sales charge breakpoints at the 
plan level if the plans are sponsored by the same employer.


If you believe there are cumulative quantity discount eligible shares that 
can be combined with your current purchase to achieve a sales charge breakpoint 
(for example, shares held in a different broker-dealer’s brokerage account or 
with a bank or an investment advisor), it is your responsibility to specifically 
identify those shares to your financial advisor at the time of your purchase 
(including at the time of any future purchase).  If you have not designated 
a financial advisor associated with your Franklin Templeton fund shares, 
it is your responsibility to specifically identify any cumulative quantity 
discount eligible shares to the Fund’s transfer agent at the time of any 
purchase.


If there are cumulative quantity discount eligible shares that would qualify 
for combining with your current purchase and you do not tell your financial 
advisor or the Franklin Templeton funds’ transfer agent at the time of any 
purchase, you may not receive the benefit of a reduced sales charge that might 
otherwise be available since your financial advisor and the Fund generally will 
not have that information.


The value of cumulative quantity discount eligible shares equals the cost or 
current value of those shares, whichever is higher.  The current value of 
shares is determined by multiplying the number of shares by their highest 
current public offering price.  It is your responsibility to retain any 
records necessary to substantiate historical share costs because neither your 
current financial advisor nor the Franklin Templeton funds may have or maintain 
this information.


An "Employer Sponsored Retirement Plan" is a Qualified Retirement Plan, ERISA 
covered 403(b) and certain non-qualified deferred compensation arrangements that 
operate in a similar manner to a Qualified Retirement Plan, such as 457 plans 
and executive deferred compensation arrangements, but not including employer 
sponsored IRAs. A "Qualified Retirement Plan" is an employer sponsored pension 
or profit sharing plan that qualifies under section 401(a) of the Internal 
Revenue Code, including 401(k), money purchase pension, profit sharing and 
defined benefit plans.


2. Letter of intent (LOI) - expresses your intent to buy a stated 
dollar amount of "cumulative quantity discount eligible shares" (as defined in 
the "Cumulative quantity discount" section above) over a 13-month period and 
lets you receive the same sales charge as if all shares had been purchased at 
one time. We will reserve 5% of your total intended purchase in Class A shares 
registered in your name until you fulfill your LOI to cover any additional sales 
charge that may apply if you do not buy the amount stated in your LOI. It is 
your responsibility to tell your financial advisor when you believe you have 
fulfilled your LOI with sufficient cumulative quantity discount eligible 
shares.  If you have not designated a financial advisor associated with 
your Franklin Templeton fund shares, it is your responsibility to tell the 
Fund’s transfer agent when you believe you have fulfilled your LOI with 
sufficient cumulative quantity discount eligible shares.  Please refer to 
the SAI for more LOI details.


To sign up for these programs, complete the 
appropriate section of your account application.


Sales charge waivers.   Class A shares may 
be purchased without an initial sales charge or contingent deferred sales charge 
(CDSC) by certain investors or for certain payments. If you would like 
information about available sales charge waivers, call your investment 
representative or call Shareholder Services at (800) 632-2301. A list of 
available sales charge waivers also may be found in the SAI.


Investments of $1 
Million or More


If you invest $1 million or more, either as a lump sum or through our 
cumulative quantity discount or letter of intent programs, you can buy Class A 
shares without an initial sales charge. However, there is a 1% CDSC on any 
shares you sell within 18 months of purchase. The way we calculate the CDSC is 
the same for each class (please see “Contingent Deferred Sales Charge (CDSC) - 
Class A, B & C”).


Distribution and 
Service (12b-1) Fees


Class A has a distribution plan, sometimes known as a Rule 12b-1 plan, that 
allows the Fund to pay distribution fees of up to 0.25% per year to those who 
sell and distribute Class A shares and provide other services to shareholders. 
Because these fees are paid out of Class A's assets on an ongoing basis, over 
time these fees will increase the cost of your investment and may cost you more 
than paying other types of sales charges.



  
  

    SALES CHARGES - Class B 

  

    if you 
      sell your shares within this
many years after buying 
    them 		
    this % 
      is deducted from
your proceeds as a CDSC  

  

    1 
    Year 
    4 

  

    2 
    Years 
    4 

  

    3 
    Years 
    3 

  

    4 
    Years 
    3 

  

    5 
    Years 
    2 

  

    6 
    Years 
    1 

  

    7 
    Years 
    0 




There is a CDSC if you sell your shares within six years, as described in the 
table above. The way we calculate the CDSC is the same for each class (please 
see "Contingent Deferred Sales Charge (CDSC) - Class A, B & C"). After eight 
years, your Class B shares automatically convert to Class A shares, lowering 
your annual expenses from that time on.


Distribution and 
Service (12b-1) Fees


Class B has a distribution plan, sometimes known as a Rule 12b-1 plan, that 
allows the Fund to pay distribution and other fees of up to 1% per year for the 
sale of Class B shares and for services provided to shareholders. Because these 
fees are paid out of Class B's assets on an ongoing basis, over time these fees 
will increase the cost of your investment and may cost you more than paying 
other types of sales charges.



  
  

    SALES 
      CHARGES - Class C 

  

    With 
      Class C shares, there is no initial sales 
charge. 




We place any investment of $1 million or more 
in Class A shares, since Class A's annual expenses are lower.


CDSC


There is a 1% CDSC on any Class C shares you sell within 12 months of 
purchase. The way we calculate the CDSC is the same for each class (please see 
"Contingent Deferred Sales Charge (CDSC) - Class A, B & C").


Distribution and 
Service (12b-1) Fees


Class C has a distribution plan, sometimes known as a Rule 12b-1 plan, that 
allows the Fund to pay distribution and other fees of up to 1% per year for the 
sale of Class C shares and for services provided to shareholders. Because these 
fees are paid out of Class C's assets on an ongoing basis, over time these fees 
will increase the cost of your investment and may cost you more than paying 
other types of sales charges.


Contingent Deferred 
Sales Charge (CDSC) - Class A, B & C


The CDSC for each class is based on the current value of the shares being 
sold or their net asset value when purchased, whichever is less. There is no 
CDSC on shares you acquire by reinvesting your dividends or capital gain 
distributions.


To keep your CDSC as low as possible, each time you place a request to sell 
shares we will first sell any shares in your account that are not subject to a 
CDSC. If there are not enough of these to meet your request, we will sell the 
shares in the order they were purchased. We will use this same method if you 
exchange your shares into another Franklin Templeton fund (please see 
“Exchanging Shares”).





The holding period for the CDSC begins on the day you buy your shares. 
Your shares will age one month on that same date the next month and each 
following month.


For example, if you buy shares on the 18th of the month, they will age one 
month on the 18th day of the next month and each following 
month.




Reinstatement 
Privilege


If you sell shares of a Franklin Templeton fund that were held indirectly for 
your benefit in an account with your investment representative’s firm or your 
bank’s trust department or that were registered to you directly by the Fund's 
transfer agent (or, to an affiliated custodian or trustee of the Fund’s transfer 
agent), you may reinvest all or a portion of the proceeds from that sale within 
90 days of the sale without an initial sales charge. This Reinstatement 
Privilege does not apply to: (i) a purchase of Fund shares made through a 
regularly scheduled automatic investment plan such as a purchase by a regularly 
scheduled payroll deduction or transfer from a bank account, or (ii) a purchase 
of Fund shares with proceeds from the sale of Franklin Templeton fund shares 
that were held indirectly through an Employer Sponsored Retirement Plan or a 
non-Franklin Templeton individual or employer sponsored IRA.


In order to take advantage of this Reinstatement Privilege, you must inform 
your investment representative or the Fund's transfer agent of this privilege at 
the time of your investment. The proceeds from the earlier sale must also be 
invested within the same share class as that of the sold shares, except proceeds 
will be reinvested in Class A shares if the proceeds are from the sale of (i) 
Class B shares; or (ii) Class C shares or Class R shares if at the time of 
investment you have not appointed an investment representative (financial 
advisor) of record for the Fund account(s) in which the purchased shares will be 
held. Proceeds from the earlier sale of Class Z shares may also be invested in 
Class A shares under this Reinstatement Privilege.


If you paid a CDSC when you sold your Class A or C shares, we will credit 
back to you the CDSC paid on the amount you are reinvesting within 90 days of 
the sale by adding it to the amount of your reinvestment (for example, if you 
are reinvesting $10,000 within 90 days of an earlier $10,000 sale on which you 
paid a $100 CDSC, the amount of your reinvestment will equal $10,100). The new 
shares issued with your reinvestment WILL BE subject to any otherwise applicable 
CDSC. If, however, you (except Employer Sponsored Retirement Plans) paid a CDSC 
when you sold (1) Class B shares; or (2) Class C shares held at the time of sale 
in a Franklin Templeton fund account without an investment representative 
(financial advisor) appointed by you and invest the proceeds from that sale in 
Class A shares within 90 days of the sale, you will not be credited with any 
CDSC paid at the time of sale. In this case, the new Class A shares issued with 
your reinvestment WILL NOT BE subject to any otherwise applicable CDSC.


Proceeds immediately placed in a Franklin Templeton Bank Certificate of 
Deposit (CD) also may be reinvested without an initial sales charge if you 
reinvest them within 90 days from the date the CD matures, including any 
rollover.


This privilege does not apply to shares you buy and sell under our exchange 
program. Shares purchased with the proceeds from a money fund may be subject to 
a sales charge.


Qualified Investors - 
Advisor Class


The following investors or investments may qualify to buy Advisor Class 
shares of the Fund:




Buying Shares


MINIMUM INVESTMENTS - 
CLASS A & C



  
  

       
    Initial 

  

    Regular 
    accounts 
    $ 
      1,000 

  

    Automatic 
      investment plans 
    $ 
    50 

  

    UGMA/UTMA 
    accounts 
    $ 
      100 

  

    Employer Sponsored 
      Retirement Plans, SIMPLE-IRAs, SEP-IRAs, SARSEPs or 403(b) plan 
    accounts 
    no 
      minimum 

  

    IRAs, IRA 
      rollovers, Coverdell Education Savings Plans or Roth IRAs 
    $ 
      250 

  

    Broker-dealer 
      sponsored wrap account programs 
    no 
      minimum 

  

    Current and former 
      full-time employees, officers, trustees and directors of Franklin 
      Templeton entities, and their family members 
    $ 
      100 




Please note that you may only buy shares of a 
fund eligible for sale in your state or jurisdiction.


Account 
Application


If you are opening a new account, please complete and sign the enclosed 
account application. Make sure you indicate the share class you have chosen. If 
you do not indicate a class, we will place your purchase in Class A shares. To 
save time, you can sign up now for services you may want on your account by 
completing the appropriate sections of the application (see "Investor 
Services"). For example, if you would like to link one of your bank accounts to 
your Fund account so that you may use electronic funds transfer to and from your 
bank account to buy and sell shares, please complete the bank information 
section of the application. We will keep your bank information on file for 
future purchases and redemptions. We do not accept cash, credit card convenience 
checks, non-bank money orders or travelers checks as forms of payment to 
purchase shares.


Franklin Templeton Investor 
Services
P.O. Box 33030
St. Petersburg, FL 33733-8030
Call 
toll-free: (800) 632-2301
(Monday through Friday
5:30 a.m. to 
5:00 p.m., Pacific time)
or visit us online 24 hours a day, 7 days a 
week,
at franklintempleton.com


Buying Shares



  
  

    
    Opening an 
      account
    Adding to an 
      account

  

    
      
Through your investment representative

    
      
Contact your investment representative

    
      
Contact your investment representative

  

    
      
By Phone/Online
(Up to $100,000 per shareholder per 
      day)
(800) 632-2301
franklintempleton.com
Note: (1) certain 
      account types are not available for online account access and (2) the 
      amount may be higher for members of Franklin Templeton VIP 
      Services®. Please see “Franklin Templeton VIP 
      Services®” under “Investor Services” for more 
      information regarding eligibility.

    
      
If you have another Franklin Templeton fund account with your bank 
      account information on file, you may open a new account by phone. At this 
      time, a new account may not be opened online.

      
To make a same day investment, your phone order must be received and 
      accepted by us by 1:00 p.m. Pacific time or the close of the New York 
      Stock Exchange, whichever is earlier.

    
      
Before requesting a telephone or online purchase into an existing 
      account, please make sure we have your bank account information on file. 
      If we do not have this information, you will need to send written 
      instructions with your bank's name and address and a voided check or 
      savings account deposit slip. If the bank and Fund accounts do not have at 
      least one common owner, your written request must be signed by all 
      fund and bank account owners, and each individual must have his or 
      her signature guaranteed.

      
To make a same day investment, your phone or online order must be 
      received and accepted by us by 1:00 p.m. Pacific time or the close of the 
      New York Stock Exchange, whichever is earlier.

  

    
      
By Mail

    
      
Make your check payable to the Fund.

      
Mail the check and your signed application to Investor Services.

    
      
Make your check payable to the Fund. Include your account number on the 
      check.

      
Fill out the deposit slip from your account statement. If you do not 
      have a slip, include a note with your name, the Fund name, and your 
      account number.

      
Mail the check and deposit slip or note to Investor Services.

  

    
      
By Wire
(800) 632-2301
or (650) 312-2000 
collect

    
      
Call to receive a wire control number and wire instructions.

      
Wire the funds and mail your signed application to Investor Services. 
      Please include the wire control number or your new account number on the 
      application.

      
To make a same day wire investment, the wired funds must be received 
      and accepted by us by 1:00 p.m. Pacific time or the close of the New York 
      Stock Exchange, whichever is earlier.

    
      
Call to receive a wire control number and wire instructions.

      
To make a same day wire investment, the wired funds must be received 
      and accepted by us by 1:00 p.m. Pacific time or the close of the New York 
      Stock Exchange, whichever is earlier.

  

    
      
By Exchange
franklintempleton.com

    
      
Call Shareholder Services at (800) 632-2301, or send signed written 
      instructions. You also may place an online exchange order. The automated 
      telephone system cannot be used to open a new account.

      
(Please see “Exchanging Shares” for more information on 
    exchanges.)

    
      
Call Shareholder Services at (800) 632-2301, or send signed written 
      instructions. You also may place an online exchange order.

      
(Please see “Exchanging Shares” for more information on 
    exchanges.)



Investor Services


Automatic Investment 
Plan


This plan offers a convenient way for you to invest in the Fund by 
automatically transferring money from your checking or savings account each 
month to buy shares. To sign up, visit us online at franklintempleton.com or 
complete the appropriate section of your account application and mail it to 
Investor Services. If you are opening a new account, please include your minimum 
initial investment with your application.


Automatic Payroll 
Deduction


You may invest in the Fund automatically by transferring money from your 
paycheck to the Fund by electronic funds transfer. If you are interested, 
indicate on your application that you would like to receive an Automatic Payroll 
Deduction Program kit.


Automated Telephone 
System


Our automated system offers around-the-clock access to information about your 
account or any Franklin Templeton fund. This service is available by dialing any 
of the following numbers from a touch-tone phone:



  
  

    Shareholder 
Services
    (800) 
  632-2301



  
  

    Advisor Services
    (800) 
  524-4040



  
  

    Retirement Services
    (800) 
  527-2020


Distribution 
Options


You may reinvest distributions you receive from the Fund in an existing 
account in the same share class* of the Fund or another Franklin Templeton fund. 
Initial sales charges and CDSCs will not apply to reinvested distributions. You 
also can have your distributions deposited in a bank account, or mailed by 
check. Deposits to a bank account may be made by electronic funds transfer.


* Class B and C 
shareholders may reinvest their distributions in Class A shares of any Franklin 
Templeton money fund. Advisor Class shareholders may reinvest in Advisor Class 
or Class A shares of another Franklin Templeton fund. To reinvest your 
distributions in Advisor Class shares of another Franklin Templeton fund, you 
must be a current shareholder in Advisor Class or otherwise qualify to buy that 
fund's Advisor Class shares.


If you received a distribution and chose to return it to purchase additional 
shares in Class A shares of another Franklin Templeton fund, you will not be 
charged an initial sales charge if you invest the distribution within 90 days of 
the distribution date.


Please indicate on your application the distribution option you have chosen, 
otherwise we will reinvest your distributions in the same share class of the 
Fund.


Retirement 
Plans


Franklin Templeton Investments offers a variety of retirement plans for 
individuals and businesses. These plans require separate applications and their 
policies and procedures may be different than those described in this 
prospectus. For more information, including a free retirement plan brochure or 
application, please call Retirement Services at (800) 527-2020.





For retirement plans for which Franklin Templeton Bank & Trust is the 
trustee or custodian, special forms may be needed to receive distributions in 
cash. Please call (800) 527-2020 for information.




Telephone/Online 
Privileges


You will automatically receive telephone/online privileges when you open your 
account, allowing you to obtain or view your account information, and conduct a 
number of transactions by phone or online, including: buy, sell, or exchange 
shares of most funds; use electronic funds transfer to buy or sell shares of 
most funds; change your address; and, add or change account services (including 
distribution options, systematic withdrawal plans and automatic investment 
plans).


To view your account information or request online transactions, you will 
first need to register for these services at the shareholder section of our 
website at franklintempleton.com. You will be asked to accept the terms of an 
online agreement(s) and establish a password for online services. If you are 
registered for online services, you may enroll online in Franklin Templeton’s 
electronic delivery program for your shareholder documents. This will allow you 
to receive electronic delivery (through our website) of most funds’ 
prospectuses, annual/semiannual reports to shareholders, and proxy statements, 
as well as your account(s) statements and trade confirmations, and discontinue 
receiving your paper copies through the U.S. mail. Using our shareholder website 
means you are consenting to sending and receiving personal financial information 
over the Internet, so you should be sure you are comfortable with the risks.


As long as we follow reasonable security procedures and act on instructions 
we reasonably believe are genuine, we will not be responsible for any losses 
that may occur from unauthorized requests. We will request passwords or other 
information, and also may record calls. To help safeguard your account, keep 
your password confidential, and verify the accuracy of your confirmation 
statements immediately after you receive them. Contact us immediately if you 
believe someone has obtained unauthorized access to your account or password. 
For transactions done over the Internet, we recommend the use of an Internet 
browser with 128-bit encryption. Certain methods of contacting us (such as by 
phone or by Internet) may be unavailable or delayed during periods of unusual 
market activity. Of course, you can decline telephone buy, sell, or exchange 
privileges on your account application, or choose not to register for online 
privileges. If you have telephone/online privileges on your account and want to 
discontinue them, please contact us for instructions. You may reinstate 
these privileges at any time in writing, including online registration with 
respect to online privileges.


Note: We discourage you from including confidential or sensitive 
information in any Internet communication to us. If you do choose to send email 
(encrypted or not) to us over the Internet, you are accepting the associated 
risks of lack of confidentiality.


Systematic Withdrawal 
Plan


This plan allows you to automatically sell your shares and receive regular 
payments from your account. A CDSC may apply to withdrawals that exceed certain 
amounts. Certain terms and minimums apply. To sign up, visit us online at 
franklintempleton.com or complete the appropriate section of your 
application.


Franklin Templeton 
VIP Services®


You may be eligible for Franklin Templeton VIP Services® if you 
are currently eligible for the $250,000 sales charge breakpoint based solely on 
shares registered directly with the Franklin Templeton funds' transfer agent and 
excluding shares held indirectly through brokerage accounts. Franklin Templeton 
VIP Services® shareholders enjoy enhanced service and transaction 
capabilities. Please contact Shareholder Services at
(800) 632-2301 
for additional information on this program.



Selling Shares


You can sell your shares at any time. Please keep in mind that a contingent 
deferred sales charge (CDSC) may apply.


Selling Shares in 
Writing


Generally, requests to sell $100,000 or less can be made over the phone, 
online, or with a simple letter. Sometimes, however, to protect you and the 
Fund, we will need written instructions signed by all registered owners, with a 
signature guarantee for each owner, if:



We also may require a signature guarantee on instructions we receive from an 
agent, not the registered owners, or when we believe it would protect the Fund 
against potential claims based on the instructions received.


The amount may be higher for members of Franklin Templeton VIP 
Services®. Please see “Franklin Templeton VIP Services®” 
above for more information regarding eligibility.





A signature guarantee helps protect your account against fraud. You 
can obtain a signature guarantee at most banks and securities dealers.


A notary public CANNOT provide a signature guarantee.




Selling Recently 
Purchased Shares


If you sell shares recently purchased, we may delay sending you the proceeds 
until your check, draft or wire/electronic funds transfer has cleared, which may 
take seven business days or more.


Redemption 
Proceeds


Your redemption check will be sent within seven days after we receive your 
request in proper form. We are not able to receive or pay out cash in the form 
of currency.


Retirement 
Plans


You may need to complete additional forms to sell shares in a Franklin 
Templeton Bank & Trust retirement plan. For participants under the age of 59 
1/2, tax penalties may apply. Call Retirement Services at (800) 527-2020 for 
details.


Selling 
Shares




  
  

    
      
To 
      sell some or all of your shares

  

    
      
Through your 
      investment representative

      

      
Contact your 
      investment representative



      
By Mail

      

      
Send written 
      instructions and endorsed share certificates (if you hold share 
      certificates) to Investor Services. Corporate, partnership or trust 
      accounts may need to send additional documents.



      

      
Specify the Fund, the 
      account number and the dollar value or number of shares you wish to sell. 
      If you own both Class A and B shares, also specify the class of shares, 
      otherwise we will sell your Class A shares first. Be sure to include all 
      necessary signatures and any additional documents, as well as signature 
      guarantees if required.



      

      
A check will be 
      mailed to the name(s) and address on the account, or otherwise according 
      to your written instructions.



      
By 
      Phone/Online
(800) 632-2301
franklintempleton.com

      

      
As long as your 
      transaction is for $100,000 or less, you do not hold share certificates 
      and you have not changed your address by phone or online within the last 
      15 days, you can sell your shares by phone or online. The amount may be 
      higher for members of Franklin Templeton VIP Services®. Please 
      see “Franklin Templeton VIP Services®” above for more 
      information regarding eligibility.



      

      
A check will be 
      mailed to the name(s) and address on the account, or a pre-authorized 
      secondary address. Written instructions, with a signature guarantee, are 
      required to send the check to another address or to make it payable to 
      another person.



    
      
By Electronic 
      Funds Transfer (ACH)

      

      
You can call, write, 
      or visit us online to have redemption proceeds sent to a bank account. See 
      the policies at left for selling shares by mail, phone, or 
      online.



      

      
Before requesting to 
      have redemption proceeds sent to a bank account, please make sure we have 
      your bank account information on file. If we do not have this information, 
      you will need to send written instructions with your bank's name and a 
      voided check or savings account deposit slip. If the bank and Fund 
      accounts do not have at least one common owner, you must provide written 
      instructions signed by all fund and bank account owners, and 
      each individual must have his or her signature guaranteed.



      

      
If we receive your 
      request in proper form by 1:00 p.m. Pacific time, proceeds sent by ACH 
      generally will be available within two to three business 
      days.



      
By 
      Exchange

      

      
Obtain a current 
      prospectus for the fund you are considering. Prospectuses are available 
      online at franklintempleton.com.



      

      
Call Shareholder 
      Services at the number below or send signed written instructions. You also 
      may place an exchange order online. See the policies at left for selling 
      shares by mail, phone, or online.



      

      
If you hold share 
      certificates, you will need to return them to the Fund before your 
      exchange can be processed.




Franklin 
Templeton Investor Services
P.O. Box 33030, St. Petersburg, FL 
33733-8030
Call toll-free: (800) 632-2301
(Monday through Friday 5:30 a.m. 
to 5:00 p.m., Pacific time)
or visit us online 24 hours a day, 7 days a 
week,
at franklintempleton.com



Exchanging Shares


Exchange 
Privilege


Class A, B & C


You can exchange shares between most Franklin Templeton funds within the same 
class,* generally without paying any additional sales charges. If you exchange 
shares held for less than six months, however, you may be charged the difference 
between the initial sales charge of the two funds if the difference is more than 
0.25%. If you exchange shares from a money fund or another fund that does not 
have a sales charge, a sales charge may apply no matter how long you have held 
the shares.


* Class Z shareholders 
of Franklin Mutual Series Funds may exchange into Class A without any sales 
charge. Advisor Class shareholders of another Franklin Templeton fund also may 
exchange into Class A without any sales charge. Advisor Class shareholders who 
exchange their shares for Class A shares and later decide they would like to 
exchange into another fund that offers Advisor Class may do so.


Any CDSC will continue to be calculated from the date of your initial 
investment and will not be charged at the time of the exchange. The purchase 
price for determining a CDSC on exchanged shares will be the price you paid for 
the original shares. If you exchange shares subject to a CDSC into a Class A 
money fund, the time your shares are held in the money fund will not count 
towards the CDSC holding period.


If you exchange your Class B shares for the same class of shares of another 
Franklin Templeton fund, the time your shares are held in that fund will count 
towards the eight-year period for automatic conversion to Class A shares.


Advisor Class


You can exchange your Advisor Class shares for Advisor Class shares of other 
Franklin Templeton funds. You also may exchange your Advisor Class shares for 
Class A shares of a fund that does not currently offer an Advisor Class (without 
any sales charge)* or for Class Z shares of Franklin Mutual Series Funds.


* If you exchange into 
Class A shares and you later decide you would like to exchange into a fund that 
offers an Advisor Class, you may exchange your Class A shares for Advisor Class 
shares if you are a current shareholder in Advisor Class or you otherwise 
qualify to buy the fund's Advisor Class shares.


In certain comprehensive fee or advisory programs that hold Class A shares, 
at the discretion of the financial intermediary, you may exchange to Advisor 
Class shares or Class Z shares.


All Classes


The remainder of the “Exchanging Shares” section applies to all classes.


Generally exchanges may only be made between identically registered accounts, 
unless you send written instructions with a signature guarantee.





An exchange is really two transactions: a sale of one fund and the 
purchase of another. In general, the same policies that apply to purchases and 
sales apply to exchanges, including minimum investment amounts. Exchanges also 
have the same tax consequences as ordinary sales and 
purchases.




Rejected exchanges.   If the Fund 
rejects an exchange request involving the sale of Fund shares, the rejected 
exchange request will also mean rejection of the request to purchase shares of 
another fund with the proceeds of the sale. Of course, you may generally redeem 
shares of the Fund at any time.


Exchanges through financial 
intermediaries.   If you are investing indirectly in the Fund 
through a financial intermediary such as a broker-dealer, a bank, an insurance 
company separate account, an investment advisor, an administrator or trustee of 
an IRS-recognized tax-deferred savings plan such as a 401(k) retirement plan and 
a 529 college savings plan that maintains a master account (an Omnibus Account) 
with the Fund for trading on behalf of its customers, different exchange and/or 
transfer limit guidelines and restrictions may apply. The financial intermediary 
through whom you are investing may choose to adopt different trading 
restrictions designed to discourage short-term or excessive trading. Consult 
with your financial intermediary (or, in the case of a 401(k) retirement plan, 
your plan sponsor) to determine what trading restrictions, including 
exchange/transfer limitations, may be applicable to you.


Fund exchange privilege changes/waiver. 
  The Fund may terminate or modify (temporarily or permanently) this 
exchange privilege in the future. You will receive 60 days' notice of any 
material changes, unless otherwise provided by law.


Other funds' exchange privileges.   
If there is a conflict between the exchange privileges of two funds involved in 
an exchange transaction, the stricter policy will apply to the transaction. 
Other Franklin Templeton funds may have different exchange restrictions. Check 
each fund's prospectus for details.


Frequent Trading 
Policy


The Fund's board of trustees has adopted the following policies and 
procedures with respect to frequent trading in Fund shares (Frequent Trading 
Policy).


The Fund discourages and does not intend to accommodate short-term or 
frequent purchases and redemptions of Fund shares, often referred to as “market 
timing.” This type of trading activity can harm the Fund by, for example, 
interfering with the efficient management of the Fund's portfolio or materially 
increasing the Fund's transaction costs, administrative costs or taxes.


In addition, since the Fund invests significantly in foreign securities, it 
may be vulnerable to a form of short-term trading that is sometimes referred to 
as “time-zone arbitrage.” Time-zone arbitrage occurs when an investor seeks to 
take advantage of delays between changes in the value of a mutual fund’s 
portfolio holdings and the reflection of those changes in the fund’s net asset 
value per share. These delays are more likely to occur in the case of foreign 
investments, due to differences between the times during which the Fund’s 
international portfolio securities trade on foreign markets and the time as of 
which the Fund’s NAV is calculated (generally as of the close of the NYSE - 
please see “Calculating Share Price”). Time-zone arbitrage traders seek to 
purchase or redeem shares of a fund based on events occurring after foreign 
market closing prices are established, but before calculation of the fund’s NAV. 
This can result in the value of the Fund’s shares being diluted. One of the 
objectives of the Fund’s fair value pricing procedures is to minimize the 
possibility of this type of arbitrage (please see "Valuation - Foreign 
Securities - Potential Impact of Time Zones and Market Holidays"); however, 
there can be no assurance that the Fund’s valuation procedures will be 
successful in eliminating it.


Since the Fund may invest in securities that are, or may be, restricted, 
unlisted, traded infrequently, thinly traded, or relatively illiquid 
("relatively illiquid securities"), it may be particularly vulnerable to 
arbitrage short-term trading. Such arbitrage traders may seek to take advantage 
of a possible differential between the last available market prices for one or 
more of those relatively illiquid securities that are used to calculate the 
Fund’s NAV and the latest indications of market values for those securities. One 
of the objectives of the Fund’s fair value pricing procedures is to minimize the 
possibilities of this type of arbitrage (please see "Fair Valuation - Individual 
Securities"); however, there can be no assurance that the Fund’s valuation 
procedures will be successful in eliminating it.


Through its transfer agent, the Fund performs ongoing monitoring of trading 
in Fund shares in order to try and identify shareholder trading patterns that 
suggest an ongoing short-term trading strategy. The size of an investor's 
investments and redemptions in the Fund may also be a factor in evaluating a 
shareholder's trading patterns. If and when a pattern of short-term trading is 
identified, the transfer agent will seek to restrict or reject further 
short-term trading and/or take other action as described below, if in the 
judgment of the Fund manager or transfer agent such trading may be detrimental 
to the Fund.


If information regarding your trading activity in this Fund or in any other 
Franklin Templeton fund or non-Franklin Templeton fund is brought to the 
attention of the Fund's manager or transfer agent and based on that information 
the Fund or its manager or transfer agent in its sole discretion reasonably 
concludes that your pattern of trading may be detrimental to the Fund as 
described in this Frequent Trading Policy, the Fund may temporarily or 
permanently bar future purchases into the Fund or, alternatively, may limit the 
amount, number or frequency of any future purchases and/or the method by which 
you may request future purchases and redemptions (including purchases and/or 
redemptions by an exchange or transfer between the Fund and any other mutual 
fund).


In considering an investor's trading patterns, the Fund may consider, among 
other factors, the investor's trading history both directly and, if known, 
through financial intermediaries, in the Fund, in other Franklin Templeton 
funds, in non-Franklin Templeton mutual funds, or in accounts under common 
control or ownership (see, for example, "Investment by asset allocators" in the 
SAI).


Frequent trading through financial 
intermediaries.   You are an investor subject to this Frequent 
Trading Policy whether you are a direct shareholder of the Fund or you are 
investing indirectly in the Fund through a financial intermediary, such as a 
broker-dealer, bank, trust company, insurance company product such as an annuity 
contract, investment advisor, or an administrator or trustee of an 
IRS-recognized tax-deferred savings plan such as a 401(k) retirement plan and a 
529 college savings plan.


Some financial intermediaries maintain master accounts with the Fund on 
behalf of their customers (“omnibus accounts”). The Fund has entered into 
“information sharing agreements” with these financial intermediaries, which 
permit the Fund to obtain, upon request, information about the trading activity 
of the intermediary’s customers that invest in the Fund. If the Fund’s transfer 
agent identifies omnibus account level trading patterns that have the potential 
to be detrimental to the Fund, the transfer agent may, in its sole discretion, 
request from the financial intermediary information concerning the trading 
activity of its customers. Based upon its review of the information, if the 
transfer agent determines that the trading activity of any customer may be 
detrimental to the Fund, it may, in its sole discretion, request the financial 
intermediary to restrict or limit further trading in the Fund by that customer. 
There can be no assurance that the transfer agent’s monitoring of omnibus 
account level trading patterns will enable it to identify all short-term trading 
by a financial intermediary’s customers.


Revocation of trades.   While the 
Fund reserves the right to reject any purchase order for any reason, the Fund 
may also revoke executed purchase orders that the transfer agent reasonably 
concludes in its sole discretion may have been contrary to the objectives of the 
Fund's Frequent Trading Policy.



Account Policies


Calculating Share 
Price


When you buy shares, you pay the "offering price" for the shares. The 
"offering price" is determined by dividing the NAV per share by an amount equal 
to 1 minus the sales charge applicable to the purchase (expressed in decimals), 
calculated to two decimal places using standard rounding criteria. The number of 
Fund shares you will be issued will equal the amount invested divided by the 
applicable offering price for those shares, calculated to three decimal places 
using standard rounding criteria. For example, if the NAV per share is $10.25 
and the applicable sales charge for the purchase is 5.75%, the offering price 
would be calculated as follows: 10.25 divided by 1.00 minus 0.0575 
[10.25/0.9425] equals 10.87533, which, when rounded to two decimal points, 
equals 10.88. The offering price per share would be $10.88.


When you sell shares, you receive the NAV minus any applicable CDSC.


The value of a mutual fund is determined by deducting the fund’s liabilities 
from the total assets of the portfolio. The NAV per share is determined by 
dividing the total net asset value of each fund’s share class by the applicable 
number of shares outstanding per share class.


The Fund calculates the NAV per share each business day at the close of 
trading on the New York Stock Exchange (NYSE) (normally 1:00 p.m. Pacific time). 
The Fund does not calculate the NAV on days the NYSE is closed for trading, 
which include New Year’s Day, Martin Luther King Jr. Day, President’s Day, Good 
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and 
Christmas Day.


When determining its NAV, the Fund values cash and receivables at their 
realizable amounts, and records interest as accrued and dividends on the 
ex-dividend date. The Fund generally utilizes two independent pricing services 
to assist in determining a current market value for each security. If market 
quotations are readily available for portfolio securities listed on a securities 
exchange, the Fund values those securities at the last quoted sale price or the 
official closing price of the day, respectively, or, if there is no reported 
sale, within the range of the most recent quoted bid and ask prices. The Fund 
values over-the-counter portfolio securities within the range of the most recent 
bid and ask prices. If portfolio securities trade both in the over-the-counter 
market and on a stock exchange, the Fund values them according to the broadest 
and most representative market.


Requests to buy and sell shares are processed at the NAV next calculated 
after we receive your request in proper form.


Generally, trading in corporate bonds, U.S. government securities and money 
market instruments is substantially completed each day at various times before 
the close of the NYSE. The value of these securities used in computing the NAV 
is determined as of such times. Occasionally, events affecting the values of 
these securities may occur between the times at which they are determined and 
the close of the NYSE that will not be reflected in the computation of the NAV. 
The Fund relies on third-party pricing vendors to monitor for events materially 
affecting the value of these securities during this period. If an event occurs, 
the third-party pricing vendors will provide revised values to the Fund.


Fair Valuation – 
Individual Securities


Since the Fund may invest in securities that are restricted, unlisted, traded 
infrequently, thinly traded, or relatively illiquid, there is the possibility of 
a differential between the last available market prices for one or more of those 
securities and the latest indications of market values for those securities. The 
Fund has procedures, approved by the board of trustees, to determine the fair 
value of individual securities and other assets for which market prices are not 
readily available (such as certain restricted or unlisted securities and private 
placements) or which may not be reliably priced (such as in the case of trade 
suspensions or halts, price movement limits set by certain foreign markets, and 
thinly traded or illiquid securities). Some methods for valuing these securities 
may include: fundamental analysis (earnings multiple, etc.), matrix pricing, 
discounts from market prices of similar securities, or discounts applied due to 
the nature and duration of restrictions on the disposition of the securities. 
The board of trustees oversees the application of fair value pricing 
procedures.


The application of fair value pricing procedures represents a good faith 
determination based upon specifically applied procedures. There can be no 
assurance that the Fund could obtain the fair value assigned to a security if it 
were able to sell the security at approximately the time at which the Fund 
determines its NAV per share.


Security Valuation – 
Corporate Debt Securities


Corporate debt securities generally trade in the over-the-counter market 
rather than on a securities exchange. The Fund may value these portfolio 
securities by utilizing quotations from bond dealers, information with respect 
to bond and note transactions and may rely on independent pricing services to 
assist in determining a current market value for each security. The Fund’s 
pricing services may utilize independent quotations from bond dealers and bond 
market activity to determine current value.


Security Valuation – 
Options


The Fund values portfolio securities underlying actively traded call options 
at their market price as determined above. The current market value of any 
option the Fund holds is its last sale price on the relevant exchange before the 
Fund values its assets. If there are no sales that day or if the last sale price 
is outside the bid and ask prices, the Fund values options within the range of 
the current closing bid and ask prices if the Fund believes the valuation fairly 
reflects the contract’s market value.


Security Valuation – 
Foreign Securities – Computation of U.S. Equivalent Value


The Fund generally determines the value of a foreign security as of the close 
of trading on the foreign stock exchange on which the security is primarily 
traded, or as of the close of trading on the NYSE, if earlier. The value is then 
converted into its U.S. dollar equivalent at the foreign exchange rate in effect 
at the close of the NYSE (generally 1:00 p.m. Pacific time) on the day that the 
value of the foreign security is determined. If no sale is reported at that 
time, the foreign security will be valued within the range of the most recent 
quoted bid and ask prices. Occasionally events (such as repatriation limits or 
restrictions) may impact the availability or reliability of foreign exchange 
rates used to convert the U.S. dollar equivalent value. If such an event occurs, 
the foreign exchange rate will be valued at fair value using procedures 
established and approved by the board of trustees.


Valuation – Foreign 
Securities – Potential Impact of Time Zones and Market Holidays


Trading in securities on foreign securities stock exchanges and 
over-the-counter markets, such as those in Europe and Asia, may be completed 
well before the close of business on the NYSE on each day that the NYSE is open. 
Occasionally, events occur between the time at which trading in a foreign 
security is completed and the close of the NYSE that might call into question 
the availability (including the reliability) of the value of a foreign portfolio 
security held by the Fund. As a result, the Fund may be susceptible to what is 
referred to as “time-zone arbitrage.” Certain investors in the Fund may seek to 
take advantage of discrepancies in the value of the Fund’s portfolio securities 
as determined by the foreign market at its close and the latest indications of 
value attributable to the portfolio securities at the time the Fund’s NAV is 
computed. Trading by these investors, often referred to as “arbitrage market 
timers,” may dilute the value of the Fund’s shares, if such discrepancies in 
security values actually exist. To attempt to minimize the possibilities for 
time-zone arbitrage, and in accordance with procedures established and approved 
by the Fund’s board of trustees, the manager monitors price movements following 
the close of trading in foreign stock markets through a series of country 
specific market proxies (such as baskets of American Depositary Receipts, 
futures contracts and exchange traded funds).


These price movements are measured against established trigger thresholds for 
each specific market proxy to assist in determining if an event has occurred 
that might call into question the availability (including the reliability) of 
the values of foreign securities between the times at which they are determined 
and the close of the NYSE. If such an event occurs, the foreign securities may 
be valued using fair value procedures established and approved by the board of 
trustees. In certain circumstances these procedures include the use of 
independent pricing services. The intended effect of applying fair value pricing 
is to compute an NAV that accurately reflects the value of the Fund’s portfolio 
at the time that the NAV is calculated, to discourage potential arbitrage market 
timing in Fund shares, to mitigate the dilutive impact of such attempted 
arbitrage market timing and to be fair to purchasing, redeeming and existing 
shareholders. However, the application of fair value pricing procedures may, on 
occasion, worsen rather than mitigate the potential dilutive impact of 
shareholder trading.


In addition, trading in foreign portfolio securities generally, or in 
securities markets in a particular country or countries, may not take place on 
every NYSE business day. Furthermore, trading takes place in various foreign 
markets on days that are not business days for the NYSE, and on which the Fund's 
NAV is not calculated. Thus, the calculation of the Fund's NAV does not take 
place contemporaneously with the determination of the prices of many of the 
foreign portfolio securities used in the calculation. If events affecting the 
last determined values of these foreign securities occur (determined through the 
monitoring process described above), the securities will be valued at fair value 
determined in good faith in accordance with the Fund’s fair value procedures 
established and approved by the board of trustees.


Accounts with Low 
Balances


If your account has been open for more than one year and its value falls 
below $500 ($50 for employee and UGMA/UTMA accounts), we will mail you a notice 
asking you to bring the account back up to its applicable minimum investment 
amount. If you choose not to do so within 30 days, we will close your account 
and mail the proceeds to the address of record. You will not be charged a CDSC 
if your account is closed for this reason. This policy does not apply to: (1) 
certain broker-controlled accounts established through the National Securities 
Clearing Corporation’s Networking system; (2) accounts in Class B and Class A 
accounts established pursuant to a conversion from Class B; (3) tax-deferred 
retirement plan accounts; (4) active automatic investment plan accounts; (5) 
broker-dealer sponsored separately managed accounts (wrap accounts); (6) 
accounts held through a 529 college savings program; and, (7) Coverdell 
Education Savings Plan accounts.


Statements, Reports 
and Prospectuses


You will receive quarterly account statements that show all your account 
transactions during the quarter. You also will receive written notification 
after each transaction affecting your account (except for distributions and 
transactions made through automatic investment or withdrawal programs, which 
will be reported on your quarterly statement).


You also will receive the Fund's financial reports every six months as well 
as an annual updated prospectus. To reduce Fund expenses, we try to identify 
related shareholders in a household and send only one copy of the financial 
reports and prospectus. This process, called "householding," will continue 
indefinitely unless you instruct us otherwise. If you prefer not to have these 
documents householded, please call us at (800) 632-2301. At any time you may 
view current prospectuses and financial reports on our website.


If you choose, you may receive your statements, financial reports and 
prospectuses through electronic delivery (please see "Investor Services - 
Telephone/Online Privileges").


Investment 
Representative Account Access


If there is a dealer or other investment representative of record on your 
account, he or she will be able to obtain your account information, conduct 
transactions for your account, and also will receive copies of all notifications 
and statements and other information about your account directly from the 
Fund.


Street or Nominee 
Accounts


You may transfer your shares from the street or nominee name account of one 
dealer to another, as long as both dealers have an agreement with Distributors. 
We will process the transfer after we receive authorization in proper form from 
your delivering securities dealer.


Joint 
Accounts


Unless you specify a different registration, shares issued to two or more 
owners are registered as "joint tenants with rights of survivorship" (shown as 
"Jt Ten" on your account statement). To make any ownership changes to jointly 
owned shares, or to sever a joint tenancy in jointly owned shares, all owners 
must agree in writing.


Joint Account Risk 
with Telephone/Online Privileges


You will automatically receive telephone/online privileges when you open your 
account. If your account has more than one registered owner, telephone/online 
privileges allow the Fund to accept online registration for online services 
(including electronic delivery of shareholder documents) and transaction 
instructions online or by telephone from only one registered owner. This means 
that any one registered owner on your account, acting alone and without the 
consent of any other registered owner, may give the Fund instructions by 
telephone, online or in writing (subject to any limitations in telephone or 
online privileges) to:



If you do NOT want another registered owner on your account to be able to 
issue these kinds of instructions to the Fund without your consent, you must 
instruct the Fund to deny/terminate online privileges and the ability to issue 
such instructions by telephone so that these types of instructions will only be 
accepted in writing signed by all account owners. This decision will apply to 
any other fund into which you may exchange your jointly owned Fund shares. Any 
later decision to permit these types of instructions by telephone and/or online 
will need to be given to the Fund in a written instruction signed by all 
registered owners.


Additional 
Policies


Please note that the Fund maintains additional policies and reserves certain 
rights, including:



Dealer and Financial 
Intermediary Compensation


Qualifying dealers who sell Fund shares may receive sales commissions and 
other payments. These are paid by Distributors from sales charges received from 
purchasing or redeeming shareholders, from distribution and service (12b-1) fees 
from the Fund and from Distributors' other financial resources. Dealers may also 
receive shareholder servicing fees for servicing investors who indirectly hold 
Franklin Templeton fund shares through dealer-maintained brokerage accounts as 
more fully described under "Shareholder servicing and transfer agent" in the 
SAI. These fees are paid by the Fund's transfer agent from payments it receives 
under its agreement with the Fund.


No dealer commission will be paid on Class A NAV purchases by Employer 
Sponsored Retirement Plans. For certain retirement plans that do not qualify to 
buy Class A shares at NAV but that qualify to buy Class A shares with a maximum 
initial sales charge of 4%, a dealer commission of 3.2% may be paid.


If any dealer commissions are paid in connection with a purchase which is 
subsequently rejected or results in any trading restriction placed on the 
purchaser as a result of a determination by the Fund's manager or transfer agent 
that the purchase may be connected with trading activity that may be detrimental 
to the Fund as described in the Fund's "Frequent Trading Policy," the dealer 
shall, upon demand, refund such commissions to Distributors.





  
  

    
    



  
  

       
    Class A 
    Class B 
    Class C 

  

    Commission (%)   
    — 
    — 
    1.001 

  

    Investment under 
      $50,000 
    5.00 
    — 
    — 

  

    $50,000 but under 
      $100,000 
    3.75 
    — 
    — 

  

    $100,000 but under 
      $250,000 
    2.80 
    — 
    — 

  

    $250,000 but under 
      $500,000 
    2.00 
    — 
    — 

  

    $500,000 but under 
      $1 million 
    1.60 
    — 
    — 

  

    $1 million or 
    more 
    up 
      to 1.002 
    — 
    — 

  

    12b-1 fee to dealer   
    0.252, 3 
    0.254 
    1.005 




1. Commission includes 
advance of the first year's 0.25% 12b-1 service fee. Distributors may pay a 
prepaid commission. However, Distributors does not pay a prepaid commission on 
any purchases by Employer Sponsored Retirement Plans.


2. For purchases at NAV 
where Distributors paid a prepaid commission, dealers may start to receive the 
12b-1 fee in the 13th month after purchase. For purchases at NAV where 
Distributors did not pay a prepaid commission, dealers may start to receive the 
12b-1 fee at the time of purchase.


3. Under the 
Distribution Plan for Class A, the Fund may pay up to 0.35% to Distributors or 
others, out of which 0.10% generally will be retained by Distributors for its 
distribution expenses. The board of trustees has determined to reduce such fees 
under the Plan from 0.35% to 0.30%, thus reducing the amount that will be 
retained by Distributors.


4. After eight years, 
Class B shares convert to Class A shares and dealers may then receive the 12b-1 
fee applicable to Class A.


5. Dealers may be 
eligible to receive up to 0.25% at the time of purchase and may be eligible to 
receive 1% starting in the 13th month. During the first 12 months, the full 
12b-1 fee will be paid to Distributors to partially offset the commission and 
the prepaid service fee paid at the time of purchase. For purchases at NAV where 
Distributors did not pay a prepaid commission, dealers may start to receive the 
12b-1 fee at the time of purchase.


Other dealer and financial intermediary 
compensation.   Distributors may make payments (a portion of 
which may be reimbursable under the terms of the Fund's Rule 12b-1 distribution 
plans) to certain dealers who have sold shares of the Franklin Templeton mutual 
funds. In the case of any one dealer, marketing support payments will not exceed 
the sum of 0.08% of that dealer's current year's total sales of Franklin 
Templeton mutual funds, and 0.05% (or 0.03%) of the total assets of equity (or 
fixed income) funds attributable to that dealer, on an annual basis. Marketing 
support payments made to organizations located outside the U.S., with respect to 
investments in the Fund by non-U.S. persons, may exceed this limitation. 
Distributors makes these payments in connection with the qualifying dealers' 
efforts to educate financial advisors about the Franklin Templeton funds. Any 
current year sales to, or assets held on behalf of, Employer Sponsored 
Retirement Plans for which payment is made to a financial intermediary pursuant 
to the following paragraph will be excluded from the calculation of marketing 
support payments pursuant to this paragraph.


Distributors and/or its affiliates may also make payments (a portion of which 
may be reimbursable under the terms of the Fund's Rule 12b-1 distribution plans) 
to certain financial intermediaries in connection with their activities that are 
intended to assist in the sale of shares of the Franklin Templeton mutual funds, 
directly or indirectly, to certain Employer Sponsored Retirement Plans. In the 
case of any one financial intermediary, such payments will not exceed 0.10% of 
the total assets of Franklin Templeton mutual funds held, directly or 
indirectly, by such Employer Sponsored Retirement Plans, on an annual basis.


A number of factors will be considered in determining these payments, 
including the qualifying dealer or financial intermediary's sales, assets and 
redemption rates, the nature and quality of any servicing provided by the 
financial intermediary, and the quality of the dealer or financial 
intermediary's relationship with Distributors. Distributors will, on an annual 
basis, determine the advisability of continuing these payments. These payments 
may be in addition to any shareholder servicing fees paid by the Fund's transfer 
agent from payments it receives under its agreement with the Fund.


To the extent permitted by SEC and Financial Industry Regulatory Authority 
rules and other applicable laws and regulations, Distributors may pay or allow 
other promotional incentives or payments to dealers.


Sale of Fund shares, as well as shares of other funds in Franklin Templeton 
Investments, is not considered a factor in the selection of broker-dealers to 
execute the Fund's portfolio transactions. Accordingly, the allocation of 
portfolio transactions for execution by broker-dealers that sell Fund shares is 
not considered marketing support payments to such broker-dealers.


You can find further details in the SAI about the payments made by 
Distributors and the services provided by your financial advisor. Your financial 
advisor may charge you additional fees or commissions other than those disclosed 
in this prospectus. You should ask your financial advisor for information about 
any payments it receives from Distributors and any services it provides, as well 
as about fees and/or commissions it charges.



Questions


If you have any questions about the Fund or your account, you can write to us 
at P.O. Box 33030, St. Petersburg, FL 33733-8030. You also can call us at one of 
the following numbers. For your protection and to help ensure we provide you 
with quality service, all calls may be monitored or recorded.



  
  

    Department Name   
    Telephone Number 
    Hours 
      (Pacific time,
Monday through Friday) 

  

    Shareholder Services   
    (800) 
      632-2301 
    5:30 
      a.m. to 5:00 p.m. 

  

    Fund Information   
    (800) 
      DIAL BEN
(800) 342-5236 		
    5:30 
      a.m. to 5:00 p.m. 

  

    Retirement Services   
    (800) 
      527-2020 
    5:30 
      a.m. to 5:00 p.m. 

  

    Advisor Services   
    (800) 
      524-4040 
    5:30 
      a.m. to 5:00 p.m. 

  

    Institutional Services   
    (800) 
      321-8563 
    6:00 
      a.m. to 4:00 p.m. 

  

    TDD (hearing impaired)   
    (800) 
      851-0637 
    5:30 
      a.m. to 5:00 p.m. 

  

    Automated Telephone System   
    (800) 
      632-2301
(800) 524-4040
(800) 527-2020 		
    (around-the-clock access) 








FOR MORE 
INFORMATION


You can learn more about the Fund in the following documents:


Annual/Semiannual 
Report to Shareholders


Includes a discussion of recent market conditions and Fund strategies that 
significantly affected Fund performance during its last fiscal year, financial 
statements, detailed performance information, portfolio holdings and, in the 
annual report only, the independent registered public accounting firm’s 
report.


Statement of 
Additional Information (SAI)


Contains more information about the Fund, its investments and policies. It is 
incorporated by reference (is legally a part of this prospectus).


For a free copy of the current annual/semiannual report or the SAI, please 
contact your investment representative or call us at the number below. You also 
can view the current annual/semiannual report and the SAI online through 
franklintempleton.com.
You also can obtain information about the Fund by 
visiting the SEC's Public Reference Room in Washington, DC (phone (202) 
551-8090) or the EDGAR Database on the SEC's Internet site at 
http://www.sec.gov. You can obtain copies of this information, after paying a 
duplicating fee, by writing to the SEC's Public Reference Section, Washington, 
DC 20549-0102 or by electronic request at the following email address: 
[email protected].





  
  

    Franklin Templeton Investments
    
      
One Franklin Parkway, 
      San Mateo, CA 94403-1906
(800) DIAL BEN® (800) 
      342-5236
TDD (Hearing Impaired) (800) 
      851-0637
franklintempleton.com

  

    
    

  

    
    
      
Investment Company Act 
      file #811-05914

  

    
      
2304

    
      
415 P 
  05/09