Templeton Institutional Funds N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06135

Templeton Institutional Funds

(Exact name of registrant as specified in charter)

300 S.E. 2^nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices) (Zip code)

Alison Baur, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant's telephone number, including area code:(954)527-7500

Date of fiscal year end: 12/31

Date of reporting period: 6/30/22

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

Semiannual

Report

Templeton

Institutional

Funds

June

30,

2022

Foreign

Smaller

Companies

Series

International

Equity

Series

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

ftinstitutional.com

Semiannual

Report

1

Contents

Semiannual

Report

Economic

and

Market

Overview

2

Foreign

Smaller

Companies

Series

3

International

Equity

Series

9

Financial

Highlights

and

Schedules

of

Investments

16

Financial

Statements

28

Notes

to

Financial

Statements

31

Shareholder

Information

44

Visit

ftinstitutional.com

for

fund

updates,

to

access

your

account,

or

to

find

investment

insights.

2

ftinstitutional.com

Semiannual

Report

SEMIANNUAL

REPORT

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

-20.18%

total

return

for

the

six

months

ended

June

30,

2022.

1

The

combination

of

resilient

consumer

demand

and

persistent

supply-chain

disruptions

contributed

to

higher

inflation

in

many

countries.

This

inflationary

pressure

led

many

of

the

world’s

central

banks

to

adopt

less

accommodative

stances

regarding

monetary

policy.

The

Chinese

government’s

imposition

of

new

lockdowns

to

quell

the

spread

of

the

Omicron

variant

of

COVID-19

pressured

Asian

and

global

emerging

market

stocks.

Russia’s

invasion

of

Ukraine

also

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

disrupted

global

economic

activity

and

commodity

markets.

In

the

U.S.,

gross

domestic

product

(GDP)

growth

turned

negative

in

the

first

quarter

of

2022

as

high

inflation,

supply

constraints

and

record

trade

deficits

weighed

on

the

economy.

Rising

prices

precipitated

a

notable

decline

in

consumer

confidence,

despite

high

spending

levels.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

in

March

2022

for

the

first

time

since

2018.

The

Fed

raised

the

federal

funds

rate

again

at

its

subsequent

two

meetings,

accelerating

the

rate

of

increase

each

time

to

end

the

period

at

a

range

of

1.50%–1.75%.

The

Fed

noted

in

its

June

meeting

that

inflation

remained

elevated,

as

job

growth

was

robust

and

the

unemployment

rate

remained

low.

Furthermore,

the

Fed

said

it

would

continue

to

reduce

its

bond

holdings,

and

anticipated

instituting

further

interest

rate

increases

at

future

meetings.

Economic

growth

in

the

eurozone

maintained

a

slow

rate

in

the

first

quarter

of

2022

as

the

war

in

Ukraine

disrupted

supply

chains,

sent

commodity

prices

higher,

and

weakened

the

economic

outlook.

The

war

in

Ukraine

contributed

to

record

high

inflation

across

the

eurozone

as

commodity

and

oil

prices

soared.

The

European

Central

Bank

indicated

it

will

raise

interest

rates

in

July,

the

first

increase

in

more

than

a

decade,

to

fight

growing

inflation.

In

this

environment,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

-20.79%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-17.69%

total

return

for

the

six-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

GDP

contracted

in

the

first

quarter

of

2022

after

having

returned

to

growth

in

the

fourth

quarter

of

2021.

Although

China’s

economy

continued

to

grow,

it

was

pressured

by

coronavirus-related

restrictions

and

government

measures

to

limit

real

estate

speculation.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-

related

businesses,

and

investor

concerns

about

the

solvency

of

several

large

Chinese

property

developers

further

pressured

Chinese

stocks.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-17.63%

total

return

for

the

six

months

under

review.

1

Following

Russia’s

invasion

of

Ukraine,

climbing

food

and

energy

prices

kindled

inflationary

pressures

and

raised

concerns

over

the

possibility

of

government

debt

defaults

in

some

countries.

Meanwhile,

some

countries,

particularly

in

Latin

America,

as

well

as

South

Africa

and

Saudi

Arabia,

have

benefited

from

the

rising

commodity

prices.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

June

30,

2022.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

3

ftinstitutional.com

Semiannual

Report

Foreign

Smaller

Companies

Series

This

semiannual

report

for

Foreign

Smaller

Companies

Series

(Fund)

covers

the

period

ended

June

30,

2022

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

investments

of

smaller

companies

located

outside

the

U.S.,

including

emerging

markets.

For

purposes

of

this

80%

policy,

the

Fund

defines

smaller

companies

as

those

with

market

capitalizations

that

do

not

exceed

$4

billion.

However,

under

normal

conditions,

when

making

an

initial

purchase

of

securities

of

a

company,

we

will

only

invest

in

securities

of

companies

with

a

market

capitalization

of

not

more

than

$2

billion.

Once

a

security

qualifies

for

initial

purchase,

it

continues

to

qualify

for

additional

purchases

as

long

as

it

is

held

by

the

Fund,

provided

that

the

issuer’s

market

capitalization

does

not

exceed

$4

billion.

Performance

Overview

The

Fund

posted

a

-24.08%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Small

Cap

Index-NR,

which

measures

the

performance

of

global

developed

and

emerging

market

small-cap

equities

excluding

the

U.S.,

posted

a

-22.92%

cumulative

total

return.

1

Please

note,

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

the

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

6

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563

.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

apply

a

bottom-up,

value-oriented,

long-term

approach,

focusing

on

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

We

also

consider

a

company’s

price/

earnings

ratio,

profit

margins

and

liquidation

value.

Manager’s

Discussion

As

we

saw

in

the

first

half

of

2022,

small-cap

equity

markets

are

particularly

vulnerable

in

times

of

uncertainty.

The

war

in

Ukraine

and

resulting

sanctions

on

Russia—

which

contributed

to

trade

disruptions,

higher

inflation,

onshoring

pressures

and

rising

defense

spending—added

geopolitical

uncertainty

to

a

market

already

pressured

by

macroeconomic

concerns.

By

nature,

small-cap

stocks

are

typically

longer-duration

assets,

and

therefore,

rising

interest

rates—especially

after

a

decade

of

declining

rates—are

detrimental

to

near-term

performance.

As

a

result

of

the

sudden

shock

caused

by

the

war

in

Ukraine,

the

market

de-emphasized

fundamentals

in

2022’s

first

quarter

as

investors

flocked

to

larger

market-cap

stocks,

liquidity

and

select

industries,

including

defense,

energy

and

commodities.

The

second

quarter

was

more

“orderly”

in

that

fundamentals

seemed

to

wrest

attention

away

from

concerns

over

market

capitalization.

Unlike

the

first

quarter,

in

which

a

“smaller

you

were,

the

smaller

you

got”

market

sentiment

took

hold,

the

second

quarter

saw

the

return

of

fundamental

investment

principles,

with

short-duration,

profitable,

cash

flow-generating

stocks

faring

well,

regardless

of

market

capitalization.

Against

this

backdrop,

the

Fund

underperformed

its

benchmark

index

for

the

six-month

period,

primarily

due

to

an

overweighting

and

stock

selection

in

the

consumer

discretionary

sector,

stock

selection

in

the

industrials

sector

and

lack

of

exposure

to

the

utilities

sector.

Performance

improved

in

the

latter

half

of

the

period,

as

the

market

Geographic

Composition

6/30/22

%

of

Total

Net

Assets

Europe

45.1%

Asia

41.3%

North

America

5.1%

Latin

America

&

Caribbean

3.4%

Middle East & Africa

1.7%

Short-Term

Investments

&

Other

Net

Assets

3.4%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

17

.

Foreign

Smaller

Companies

Series

4

ftinstitutional.com

Semiannual

Report

environment—one

in

which

investors

appeared

to

focus

on

fundamentals

rather

than

macroeconomic

events—became

considerably

more

receptive

to

our

bottom-up

approach.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Schedule

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Relative

detractors

in

consumer

discretionary

included

Sweden-based

Thule

Group,

which

focuses

on

consumer-

branded

products

in

the

outdoor

segment,

and

Watches

of

Switzerland

Group

(WOSG),

a

leading

U.K.

luxury

watch

retailer

with

a

growing

presence

in

the

U.S.

Shares

of

Thule

fell

due

to

investor

concerns

about

higher

interest

rates

and

their

impact

on

the

global

economy.

Looking

at

the

longer

term,

the

aging,

healthier

and

affluent

population

is

leading

to

an

increased

demand

for

outdoor

activities,

which

has

driven

strong

revenue

growth.

Additionally,

an

increase

in

domestic

holidays

and

“staycations”

on

the

back

of

COVID-19

may

be

supporting

demand.

The

company

has

proved,

in

our

view,

that

it

can

handle

rising

input

costs,

supply

shortages

and

elevated

demand

better

than

many

other

manufacturing

companies

in

the

Nordic

area.

Thule's

products

are

of

high

quality,

carry

premium

prices

and

are

highly

rated

in

open

consumer

reviews.

WOSG

shares

declined

on

slower

economic

growth

and

weakening

consumer

demand.

Looking

at

the

longer

term,

management

has

increased

digital

customer

engagement

activity

and

plans

to

extend

it

going

forward.

We

believe

WOSG

is

still

in

the

nascent

phase

of

its

development

despite

being

a

long-standing

market

leader

in

the

U.K.

We

see

meaningful

tailwinds

for

the

WOSG

equity

story

from

a

product

and

geographic

perspective.

Switzerland-based

Montana

Aerospace,

a

manufacturer

of

lightweight

critical

structural

parts

and

assemblies

made

of

various

hard

metals,

was

a

significant

relative

detractor

in

the

industrials

sector.

The

company

was

impacted

by

rising

energy

costs,

which

led

to

analyst

downgrades.

We

believe

the

market

has

overreacted,

and

we

remain

confident

in

the

stock’s

long-term

potential.

Montana

Aerospace

is

vertically

integrated

across

the

entire

set

of

production

steps—raw

material

recycling,

casting,

extrusion,

machining,

surface

treatment

and

sub-assembly—with

many

steps

occurring

in

a

single

location.

This

vertical

integration

meaningfully

reduces

the

complexity

of

procurement

relative

to

the

traditional

model,

which

might

include

four

to

six

separate

sub-suppliers

for

a

single

part.

Montana

Aerospace

has

demonstrated

that

this

integrated

model

eliminates

dependencies

and

transport

costs

between

sub-suppliers

and

increases

flexibility

to

respond

to

changes.

Ultimately,

it

increases

reliability

and

lowers

supply-chain

risks

for

the

customer.

In

contrast,

stock

selection

in

the

information

technology

(IT),

health

care

and

communication

services

sectors

contributed

to

relative

performance

during

the

period.

Portfolio

Composition

6/30/22

%

of

Total

Net

Assets

Machinery

11.2%

Electronic

Equipment,

Instruments

&

Components

9.4%

Leisure

Products

7.9%

Capital

Markets

5.9%

Textiles,

Apparel

&

Luxury

Goods

5.8%

Food

Products

4.9%

Professional

Services

4.3%

Specialty

Retail

3.4%

Banks

3.4%

Life

Sciences

Tools

&

Services

2.7%

Food

&

Staples

Retailing

2.6%

Technology

Hardware,

Storage

&

Peripherals

2.6%

Pharmaceuticals

2.5%

Entertainment

2.5%

Other*

27.5%

Short-Term

Investments

&

Other

Net

Assets

3.4%

Top

10

Holdings

6/30/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Man

Group

plc

2.0%

Capital

Markets,

United

Kingdom

Xtep

International

Holdings

Ltd.

2.0%

Textiles,

Apparel

&

Luxury

Goods,

China

Sanlorenzo

SpA

1.8%

Leisure

Products,

Italy

Meitec

Corp.

1.7%

Professional

Services,

Japan

Tsumura

&

Co.

1.6%

Pharmaceuticals,

Japan

Huhtamaki

OYJ

1.6%

Containers

&

Packaging,

Finland

Canadian

Western

Bank

1.6%

Banks,

Canada

Barco

NV

1.6%

Electronic

Equipment,

Instruments

&

Components,

Belgium

Asics

Corp.

1.6%

Textiles,

Apparel

&

Luxury

Goods,

Japan

King

Yuan

Electronics

Co.

Ltd.

1.5%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Foreign

Smaller

Companies

Series

5

ftinstitutional.com

Semiannual

Report

VTech

Holdings,

a

Hong

Kong-based

supplier

of

electronic

learning

products

and

cordless

phones,

was

the

most

significant

contributor

to

IT

returns

for

the

period,

with

shares

benefiting

from

financial

results

that

showed

stable

revenue

despite

global

supply-chain

disruptions.

Looking

at

the

longer

term,

we

believe

VTech

is

well-positioned

in

scale

and

cost

competitiveness

to

maintain

its

leading

position

in

the

U.S.

and

expand

sales

in

Europe

and

Asia.

Belgium-based

Fagron,

a

global

leader

in

pharmaceutical

compounding,

was

the

top

health

care

contributor

for

the

period.

Shares

rebounded

after

a

disappointing

2021

in

which

shares

were

impacted

by

a

reversal

of

COVID-19

demand,

low

levels

of

elective

care

and

inflationary

pressures.

During

the

period,

the

company

reported

full-

year

2021

results

that

were

in

line

with

analyst

expectations.

We

view

Fagron

as

an

attractive

defensive

growth

play

at

a

reasonable

price

within

the

global

niche

of

compounding,

which

makes

up

roughly

one

percent

of

prescriptions.

The

company

combines

what

we

view

as

compelling

characteristics,

such

as

above-average

earnings

visibility,

solid

cash

conversion,

leading

market

positions,

a

value-

creating

merger-and-acquisition

strategy

and

scalability.

The

top

overall

stock

contributor

for

the

period

was

Xtep

International

Holdings,

a

leading

China-based

sportswear

brand

and

wholesaler.

Shares

rallied

after

the

firm

reported

strong

financial

results,

suggesting

that

recent

investments

in

brand

image

and

product

innovation

are

bearing

fruit

domestically.

We

are

positive

on

management’s

initiative

to

facilitate

supply

chain

management,

retail

operating

efficiency,

and

online

channels,

which

we

believe

are

the

key

competences

for

driving

sales

growth.

We

expect

Xtep

to

benefit

from

rising

demand

for

domestic

sportswear

brands

by

continuing

to

invest

in

branding

and

research

and

development.

Regionally,

holdings

in

the

eurozone

and

Asia

were

the

Fund’s

primary

relative

detractors.

Holdings

in

non-eurozone

Europe,

Latin

America

and

the

U.K.

contributed

to

relative

performance

for

the

period.

Thank

you

for

your

continued

participation

in

Foreign

Smaller

Companies

Series.

We

look

forward

to

serving

your

future

investment

needs.

Harlan

B.

Hodes,

CPA

Lead

Portfolio

Manager

David

A.

Tuttle,

CFA

Heather

Waddell,

CFA

Katie

Ylijoki,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

June

30,

2022

Foreign

Smaller

Companies

Series

6

ftinstitutional.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

6/30/22

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563.

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

6-Month

-24.08%

-24.08%

1-Year

-25.46%

-25.46%

5-Year

+2.46%

+0.49%

10-Year

+66.33%

+5.22%

See

page

7

for

Performance

Summary

footnotes.

Foreign

Smaller

Companies

Series

Performance

Summary

7

ftinstitutional.com

Semiannual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Smaller,

midsized

and

relatively

new

or

unseasoned

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger,

more

established

companies.

Historically,

these

securities

have

exhibited

greater

price

volatility

than

large-company

stocks,

particularly

over

the

short

term.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments.

Investments

in

emerging

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

smaller

size

and

lesser

liquidity.

From

time

to

time,

the

trading

market

for

a

particular

security

or

type

of

security

may

become

less

liquid

or

even

illiquid.

Reduced

liquidity

will

have

an

adverse

impact

on

the

security’s

value

and

on

the

Fund’s

ability

to

sell

such

securities

when

necessary

to

meet

the

Fund’s

liquidity

needs

or

in

response

to

a

specific

economic

event.

Because

the

Fund

may

invest

its

assets

in

companies

in

a

specif-

ic

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Political,

social

or

economic

disruptions

in

the

region,

even

in

countries

in

which

the

Fund

is

not

invested,

may

adversely

affect

the

value

of

securities

held

by

the

Fund.

Current

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

in-

crease

market

volatility.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Total

Annual

Operating

Expenses

3

1.04%

Your

Fund’s

Expenses

Foreign

Smaller

Companies

Series

8

ftinstitutional.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

if

applicable,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value.”

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Beginning

Account

Value

1/1/22

Ending

Account

Value

6/30/22

Expenses

Paid

During

Period

1/1/22–6/30/22

1,2

Ending

Account

Value

6/30/22

Expenses

Paid

During

Period

1/1/22–6/30/22

1,2

a

Net

Annualized

Expense

Ratio

2

$1,000

$759.20

$4.52

$1,019.65

$5.19

1.04%

9

ftinstitutional.com

Semiannual

Report

International

Equity

Series

This

semiannual

report

for

International

Equity

Series

(Fund)

covers

the

period

ended

June

30,

2022

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

foreign

(non-U.S.)

equity

securities.

The

Fund

invests

predominantly

in

companies

located

outside

the

U.S.

including

companies

located

in

developing

market

countries.

Performance

Overview

The

Fund’s

Primary

shares

posted

a

-13.29%

cumulative

total

return

for

the

six

months

under

review.

For

comparison,

the

Fund’s

primary

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

which

measures

the

equity

market

performance

of

global

developed

and

emerging

markets

excluding

the

U.S.,

posted

a

-18.42%

cumulative

total

return.

1

Also

in

comparison,

the

Fund’s

secondary

benchmark,

the

MSCI

Europe,

Australasia,

Far

East

Index

(EAFE)-NR,

which

measures

the

equity

market

performance

of

global

developed

markets

excluding

the

U.S.

and

Canada,

posted

a

-19.57%

cumulative

total

return.

1

Please

note,

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

an

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

12

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563

.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

employ

a

bottom-up,

value-oriented,

long-term

investment

approach,

focusing

on

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value.

We

attempt

to

identify

those

companies

that

offer

above-average

opportunities

for

capital

appreciation

in

various

countries

and

industries

where

economic

and

political

factors,

including

currency

movements,

are

favorable

to

capital

growth.

For

purposes

of

pursuing

the

Fund’s

investment

goal,

we

intend

to

enter

into

equity

derivative

instruments,

including

equity

index

futures

contracts.

We

use

these

derivative

instruments

for

investment

purposes,

including

for

cash

management

purposes

and

to

generate

income,

to

increase

liquidity

and/or

to

adjust

the

Fund’s

exposure

to

certain

equity

markets

in

a

more

efficient

or

less

expensive

way.

Manager’s

Discussion

As

we

pass

the

midway

mark

of

2022,

we

face

one

of

the

greatest

confluences

of

uncertainties

impacting

global

markets

in

decades.

Major

forces

impacting

risk

assets

include

rising

global

inflation

and

central

bank

tightening,

increasing

recession

risks

in

major

developed

economies,

the

war

in

Ukraine,

Chinese

business

regulations

and

zero-

COVID

policies,

and

broader

deglobalization

and

onshoring

trends.

Equity

markets

are

being

negatively

impacted

by

slowing

consumer

demand

and

confidence,

increasing

costs

and

price

inelasticity,

peak

profit

margins,

and

general

uncertainty

around

the

depth

and

duration

of

the

bear

market.

The

MSCI

ACWI

ex

USA

Index

declined

more

than

20%

off

its

highs

by

period-end,

officially

entering

bear

market

territory.

Leading

the

non-U.S.

market

lower

were

formerly

high-flying

growth

sectors

and

industries

like

information

technology

(IT)

and

the

media

and

entertainment

segment

of

communication

services.

In

an

historical

context,

these

are

material

declines,

albeit

ones

we

believe

we

have

navigated

well.

While

material,

it’s

important

to

note

that

most

of

the

selloff

so

far

has

resulted

from

what

we

view

as

well-justified

price-to-earnings

(P/E)

contraction,

not

earnings

declines.

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

24

.

Geographic

Composition

6/30/22

%

of

Total

Net

Assets

Europe

63.5%

Asia

24.9%

North

America

7.1%

Latin

America

&

Caribbean

1.8%

Short-Term

Investments

&

Other

Net

Assets

2.7%

International

Equity

Series

10

ftinstitutional.com

Semiannual

Report

Within

this

challenging

environment,

we

believe

the

Fund

has

a

better

balance

of

quality,

earnings

growth

and

valuation

than

the

overall

market

and

is

well-positioned

going

forward.

Encouragingly,

the

Fund

performed

better

than

its

benchmark

for

the

six

months

under

review.

Key

contributors

to

relative

performance

were

stock

selection

in

the

industrials

sector,

an

overweighting

and

stock

selection

in

the

energy

sector,

and

an

underweighting

and

stock

selection

in

the

IT

sector.

U.K.-based

BAE

Systems,

one

of

the

largest

defense

contractors

in

the

world,

was

the

most

significant

industrials

contributor

for

the

period.

Shares

rose

after

the

company

posted

better-than-expected

results

due

to

strong

order

growth,

enhanced

by

favorable

operating

and

financial

leverage

that

led

to

positive

earnings

revisions.

The

conflict

in

Ukraine

and

heightened

geopolitical

uncertainty

have

driven

higher

investment

in

global

defense

budgets,

and

BAE

has

benefited

from

program

increases

in

North

America,

the

U.K.

and

Australia.

The

backlog

has

been

growing

for

its

Eurofighter

combat

aircrafts

in

both

the

Middle

East

and

Europe,

and

combat

systems

have

also

enjoyed

better-than-expected

production.

The

stronger

results

and

above-average

visibility

for

future

growth

has

led

to

further

valuation-multiple

expansion.

Integrated

oil

multinationals

TotalEnergies,

BP

and

Shell

performed

relatively

well

during

the

period

as

oil

and

gas

prices

remained

elevated

on

the

back

of

the

tight

supply-

and-demand

environment.

Demand

has

risen

significantly

from

pandemic

lows,

while

an

underinvestment

in

supply

was

due

to

previously

low

prices,

capital

discipline

across

the

industry

and

shareholder

pressure.

These

factors,

combined

with

the

invasion

of

Ukraine

limiting

Russian

supplies,

have

kept

markets

very

tight,

and

oil

prices

have

risen.

Overall,

integrated

oil

companies

are

valued,

in

our

opinion,

with

free

cash

flow

yields

approaching

20%

in

some

cases

(in

the

near

term),

the

majority

of

which

is

being

used

to

repurchase

shares

at

discounted

valuations,

pay

healthy

dividends

to

shareholders

and

reduce

debt,

all

while

keeping

capital

spending

disciplined.

IT

was

the

market’s

worst-performing

sector

during

the

period,

and

globally

is

down

substantially

from

its

highs

at

the

end

of

last

year.

Semiconductors

remained

the

sector’s

most

cyclical

industry

and

suffered

amid

growing

concerns

that

war

in

Europe

and

tighter

monetary

policy

would

lead

to

a

slowdown.

However,

we

continue

to

favor

select

chipmakers

given

their

good

exposure

to

long-term

growth

trends

tied

to

digitalization,

energy

efficiency

and

electric

vehicles.

In

general,

our

valuation

discipline

and

avoidance

of

what

we

view

as

overvalued

(and

often

profitless)

thematic

stocks

in

the

sector

has

continued

to

serve

us

well

so

far

in

2022.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Schedule

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

In

contrast,

stock

selection

in

the

utilities,

materials

and

consumer

discretionary

sectors

detracted

from

relative

performance

for

the

period.

E.ON,

one

of

the

largest

utilities

in

Europe,

was

the

largest

detractor

from

returns

in

the

utilities

sector.

Its

primary

business

is

operating

the

electrical

distribution

network

in

Germany.

After

a

long

period

of

corporate

simplification,

E.ON

is

now

executing

well

on

its

strategy

to

accelerate

growth

in

its

German

regulated

asset

base

while

at

the

same

time

funding

5-10%

dividend

growth.

However,

E.ON

is

a

key

player

in

the

German

power

system

(buying

power

to

sell

on

to

retail

and

corporate

customers),

which

is

under

severe

pressure

given

its

reliance

on

Russian

gas

to

power

homes,

businesses

and

factories.

E.ON

is

less

adversely

exposed

to

natural

gas

price

increases

than

industry

peers

that

are

forced

to

secure

natural

gas

at

high

spot

prices

to

honor

contractual

obligations,

and

we

believe

it

is

relatively

better

positioned

to

pass

on

higher

costs

to

customers.

We

continue

to

monitor

the

potential

impact

of

the

energy

crisis

in

Europe

on

E.ON

pricing

and

sales

volumes.

DS

Smith,

Europe’s

second-largest

box

manufacturer,

was

the

largest

detractor

in

the

materials

sector,

with

its

shares

weakening

on

macroeconomic

and

geopolitical

uncertainties

and

concerns

over

rising

raw

material

prices.

Looking

Portfolio

Composition

6/30/22

%

of

Total

Net

Assets

Banks

15.0%

Oil,

Gas

&

Consumable

Fuels

12.5%

Pharmaceuticals

8.8%

Semiconductors

&

Semiconductor

Equipment

4.5%

Metals

&

Mining

4.4%

Multi-Utilities

4.3%

Diversified

Telecommunication

Services

3.9%

Automobiles

3.8%

Aerospace

&

Defense

2.8%

Technology

Hardware,

Storage

&

Peripherals

2.6%

Industrial

Conglomerates

2.1%

Health

Care

Equipment

&

Supplies

2.1%

Household

Durables

2.0%

Professional

Services

1.9%

Other*

26.6%

Short-Term

Investments

&

Other

Net

Assets

2.7%

International

Equity

Series

11

ftinstitutional.com

Semiannual

Report

ahead,

DS

Smith’s

high

exposure

to

resilient

end

markets

should,

in

our

view,

provide

demand

stability

in

the

case

of

an

economic

slowdown.

In

the

medium

term,

we

believe

that

growth

in

the

container

and

packaging

industry

is

attractive,

supported

by

e-commerce

and

a

sustainability

shift

from

plastic.

In

consumer

discretionary,

Sony

Group’s

shares

underperformed

on

investor

concerns

about

growing

macroeconomic

weakness.

The

company

reported

in-line

fiscal-year

2022

results,

but

concerns

lingered

about

Sony’s

need

to

invest

more

into

its

games

business

to

remain

competitive

in

the

gaming

space,

as

well

as

its

joint

venture

with

Honda

Motor

(also

a

Fund

holding)

to

develop

electric

vehicles.

We

consider

both

issues

transitory.

In

the

longer

term,

Sony

has

a

collection

of

strong

franchises

that

we

believe

are

well-positioned

to

benefit

from

secular

growth

trends.

It

is

an

asset-rich

conglomerate

with

latent

value

that

we

believe

can

be

released

as

it

continues

to

rationalize

its

business

and

improve

shareholder

returns.

Regionally,

an

overweighting

and

stock

selection

in

the

U.K.

and

stock

selection

in

the

eurozone

contributed

to

relative

performance

for

the

period.

We

have

significantly

increased

exposure

to

the

U.K.

in

recent

quarters,

as

it

represents

one

of

the

cheapest

developed

markets

in

the

world

with

only

modest

dependence

on

foreign

energy

imports

and

numerous

companies

generating

a

large

proportion

of

their

revenues

abroad.

Asia

ex-Japan

holdings

hurt

relative

performance

mainly

from

the

Fund

not

owning

Chinese

stocks.

The

Chinese

market

rebounded

strongly

in

the

second

half

of

the

period

as

policymakers

eased

financial

conditions

and

offered

some

indications

that

the

regulatory

crackdown

on

technology

companies

was

past

its

peak.

We

would

consider

re-entering

China

should

concrete

evidence

emerge

that

regulatory

risks

have

peaked.

At

the

moment,

however,

uncertainty

on

the

subject

makes

it

difficult

to

forecast

earnings

and

manage

risk

with

any

degree

of

conviction.

The

country’s

zero-COVID

policy

means

that

large

swathes

of

the

economy

are

subject

to

lockdown

at

a

moment’s

notice.

The

real

estate

market

is

overleveraged

and

largely

reliant

on

the

largesse

of

the

government

to

prevent

mass

defaults.

Consumer

spending

is

also

beholden

to

government

whims,

with

luxury

goods

demand

faltering

in

this

previously

important

growth

market

as

policymakers

crack

down

on

perceived

corruption.

The

country’s

designs

on

Taiwan

and

other

disputed

territories

around

the

South

China

Sea

also

elevate

geopolitical

risks

to

levels

that

are

difficult

to

calculate

and

forecast.

China

will

remain

a

powerful

economy

with

a

fast-growing

consumer

class,

but

political

uncertainty

and

opacity

have

kept

us

on

the

sidelines

for

now.

Thank

you

for

your

continued

participation

in

International

Equity

Series.

We

look

forward

to

serving

your

future

investment

needs.

Antonio

T.

Docal,

CFA

Lead

Portfolio

Manager

Peter

A.

Nori,

CFA

Matthew

R.

Nagle,

CFA

Heather

Waddell,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Top

10

Holdings

6/30/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

TotalEnergies

SE

4.3%

Oil,

Gas

&

Consumable

Fuels,

France

Shell

plc

4.3%

Oil,

Gas

&

Consumable

Fuels,

Netherlands

BP

plc

3.9%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Deutsche

Telekom

AG

3.9%

Diversified

Telecommunication

Services,

Germany

BAE

Systems

plc

2.8%

Aerospace

&

Defense,

United

Kingdom

Lloyds

Banking

Group

plc

2.7%

Banks,

United

Kingdom

Samsung

Electronics

Co.

Ltd.

2.6%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Sumitomo

Mitsui

Financial

Group,

Inc.

2.6%

Banks,

Japan

AstraZeneca

plc

2.5%

Pharmaceuticals,

United

Kingdom

GSK

plc

2.3%

Pharmaceuticals,

United

States

Performance

Summary

as

of

June

30,

2022

International

Equity

Series

12

ftinstitutional.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

6/30/22

1,2

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563

.

Share

Class

Cumulative

Total

Return

3

Average

Annual

Total

Return

4

–

Primary

6-Month

-13.29%

-13.29%

1-Year

-15.68%

-15.68%

5-Year

-0.47%

-0.09%

10-Year

+45.57%

+3.83%

Service

6-Month

-13.48%

-13.48%

1-Year

-15.84%

-15.84%

5-Year

-1.31%

-0.26%

10-Year

+43.27%

+3.66%

See

page

13

for

Performance

Summary

footnotes.

International

Equity

Series

Performance

Summary

13

ftinstitutional.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Foreign

investing

involves

special

risks,

including

currency

fluctuations,

economic

instability

and

political

developments.

Investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

small

or

midcap

size

and

lesser

liquidity.

Because

the

Fund

may

invest

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Political,

social

or

economic

disruptions

in

the

region,

even

in

countries

in

which

the

Fund

is

not

invested,

may

adversely

affect

the

value

of

securities

held

by

the

Fund.

Current

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Value

securities

may

not

increase

in

price

as

anticipated

or

may

decline

further

in

value.

Derivatives

involve

costs

and

can

create

economic

leverage

in

the

Fund’s

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

in

an

amount

that

significantly

exceeds

the

Fund’s

initial

investment.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

The

Fund

has

an

expense

reduction

contractually

guaranteed

through

4/30/23.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

2.

Total

return

was

positively

impacted

by

the

recognition

of

tax

reclaims

for

previously

withheld

taxes

on

dividends

in

certain

countries

across

the

European

Union

(see

Note

1e

in

the

Notes

to

Financial

Statements

section).

Uncertainty

exists

with

respect

to

future

recognition

of

additional

European

Union

tax

reclaims.

Total

return

would

have

been

lower

without

recognition

of

such

tax

reclaims

during

the

year

ended

12/31/20.

3.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

4.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

5.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

Primary

0.91%

0.95%

Service

1.06%

1.10%

Your

Fund’s

Expenses

International

Equity

Series

14

ftinstitutional.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

if

applicable,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/22

Ending

Account

Value

6/30/22

Expenses

Paid

During

Period

1/1/22–6/30/22

1,2

Ending

Account

Value

6/30/22

Expenses

Paid

During

Period

1/1/22–6/30/22

1,2

a

Net

Annualized

Expense

Ratio

2

Primary

$1,000

$1,132.90

$4.89

$1,020.21

$4.63

0.92%

Service

$1,000

$1,134.80

$5.61

$1,019.54

$5.31

1.06%

15

ftinstitutional.com

Semiannual

Report

ZTIF

P1

08/22

SUPPLEMENT

DATED

AUGUST

10,

2022

TO

THE

PROSPECTUS

DATED

MAY

1,

2022

OF

INTERNATIONAL

EQUITY

SERIES

(a

series

of

Templeton

Institutional

Funds)

The

prospectus

is

amended

as

follows:

I.

The

portfolio

management

team

under

the

“FUND

SUMMARY

–

Portfolio

Managers”

section

in

the

prospectus

is

replaced

with

the

following:

Portfolio

Managers

Peter

A.

Nori,

CFA

Executive

Vice

President/Portfolio

Manager-Research

Analyst

of

Investment

Counsel

and

portfolio

manager

of

the

Fund

since

1999.

Matthew

R.

Nagle,

CFA

Portfolio

Manager

of

Investment

Counsel

and

portfolio

manager

of

the

Fund

since

2018.

Heather

Waddell,

CFA

Senior

Vice

President/Portfolio

Manager-Research

Analyst

of

Investment

Counsel

and

portfolio

manager

of

the

Fund

since

March

2022.

II.

The

portfolio

management

team

under

the

“Fund

Details

–

Management”

section

in

the

prospectus

is

replaced

with

the

following:

The

Fund

is

managed

by

a

team

of

dedicated

professionals

focused

on

investments

in

foreign

markets.

The

portfolio

managers

of

the

Fund

are

as

follows:

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

1999

and

lead

portfolio

manager

since

August

2022.

He

has

primary

responsibility

for

the

investments

of

the

Fund.

He

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

investment

management

requirements.

The

degree

to

which

he

may

perform

these

functions,

and

the

nature

of

these

functions,

may

change

from

time

to

time.

He

joined

Franklin

Templeton

in

1987.

Matthew

R.

Nagle,

CFA

Portfolio

Manager

of

Investment

Counsel

Mr.

Nagle

has

been

a

portfolio

manager

of

the

Fund

since

2018,

providing

research

and

advice

on

the

purchases

and

sales

of

individual

securities,

and

portfolio

risk

assessment.

He

joined

Franklin

Templeton

in

2003.

Heather

Waddell,

CFA

Senior

Vice

President/Portfolio

Manager

-

Research

Analyst

of

Investment

Counsel

Ms.

Waddell

has

been

a

portfolio

manager

of

the

Fund

since

March

2022,

providing

research

and

advice

on

the

purchases

and

sales

of

individual

securities,

and

portfolio

risk

assessment.

She

joined

Franklin

Templeton

in

1996.

CFA

®

and

Chartered

Financial

Analyst

®

are

trademarks

owned

by

CFA

Institute.

Please

keep

this

supplement

with

your

prospectus

for

future

reference.

Templeton

Institutional

Funds

Financial

Highlights

Foreign

Smaller

Companies

Series

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

a

Six

Months

Ended

June

30,

2022

(unaudited)

Year

Ended

December

31,

2021

2020

2019

2018

2017

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$21.80

$23.03

$21.40

$17.96

$25.08

$19.93

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.15

0.28

0.17

0.30

0.37

0.30

Net

realized

and

unrealized

gains

(losses)

(5.41)

2.07

1.74

3.79

(4.97)

6.49

Total

from

investment

operations

........

(5.26)

2.35

1.91

4.09

(4.60)

6.79

Less

distributions

from:

Net

investment

income

..............

—

(0.28)

(0.22)

(0.37)

(0.21)

(0.68)

Net

realized

gains

.................

—

(3.30)

(0.06)

(0.28)

(2.31)

(0.96)

Total

distributions

...................

—

(3.58)

(0.28)

(0.65)

(2.52)

(1.64)

Net

asset

value,

end

of

period

..........

$16.54

$21.80

$23.03

$21.40

$17.96

$25.08

Total

return

c

.......................

(24.08)%

10.72%

8.95%

22.86%

(18.48)%

34.18%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.04%

1.04%

1.04%

1.02%

1.01%

0.99%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.04%

e

1.04%

e

1.03%

1.02%

e

1.00%

f

0.98%

f

Net

investment

income

...............

1.55%

1.13%

0.87%

1.48%

1.54%

1.28%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$512,062

$739,717

$725,098

$782,971

$739,576

$1,040,180

Portfolio

turnover

rate

................

6.70%

31.09%

34.89%

39.48%

34.10%

25.97%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited),

June

30,

2022

Foreign

Smaller

Companies

Series

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

a

a

Industry

Shares

a

Value

a

Common

Stocks

96.5%

Austria

1.7%

AT&S

Austria

Technologie

&

Systemtechnik

AG

..............

Electronic

Equipment,

Instruments

&

Components

88,251

$

4,742,156

a,b

DO

&

CO

AG

...................

Commercial

Services

&

Supplies

44,748

3,764,347

8,506,503

Bahamas

1.0%

a

OneSpaWorld

Holdings

Ltd.

........

Diversified

Consumer

Services

736,605

5,281,458

Belgium

3.9%

Barco

NV

......................

Electronic

Equipment,

Instruments

&

Components

384,840

8,115,530

Fagron

........................

Health

Care

Providers

&

Services

397,990

6,450,878

a

Kinepolis

Group

NV

..............

Entertainment

111,342

5,359,737

19,926,145

Brazil

2.4%

Camil

Alimentos

SA

...............

Food

Products

3,066,500

5,765,398

a

M

Dias

Branco

SA

................

Food

Products

1,264,700

6,306,947

12,072,345

Canada

3.5%

a,b

Canada

Goose

Holdings,

Inc.

.......

Textiles,

Apparel

&

Luxury

Goods

126,300

2,278,345

Canadian

Western

Bank

...........

Banks

405,560

8,201,310

Computer

Modelling

Group

Ltd.

......

Energy

Equipment

&

Services

1,061,104

4,006,344

North

West

Co.,

Inc.

(The)

..........

Food

&

Staples

Retailing

123,700

3,199,171

17,685,170

China

3.8%

Greatview

Aseptic

Packaging

Co.

Ltd.

.

Containers

&

Packaging

4,562,900

913,272

c

JNBY

Design

Ltd.,

Reg

S

..........

Textiles,

Apparel

&

Luxury

Goods

1,592,500

1,826,824

c

Shanghai

Haohai

Biological

Technology

Co.

Ltd.,

H,

144A,

Reg

S

.........

Biotechnology

564,000

2,991,397

a,b,c

Viva

Biotech

Holdings,

144A,

Reg

S

..

Life

Sciences

Tools

&

Services

8,997,000

3,126,566

b

Xtep

International

Holdings

Ltd.

......

Textiles,

Apparel

&

Luxury

Goods

5,739,344

10,399,228

19,257,287

Denmark

0.5%

Matas

A/S

......................

Specialty

Retail

252,675

2,638,033

Finland

3.2%

Anora

Group

OYJ

................

Beverages

564,555

4,578,962

Fiskars

OYJ

Abp

.................

Household

Durables

190,477

3,581,301

Huhtamaki

OYJ

..................

Containers

&

Packaging

210,874

8,388,446

16,548,709

France

0.3%

Beneteau

SA

....................

Leisure

Products

128,986

1,309,534

Germany

6.1%

Adesso

SE

.....................

IT

Services

22,333

3,435,879

a,b

flatexDEGIRO

AG

................

Capital

Markets

242,182

2,314,932

b

Gerresheimer

AG

................

Life

Sciences

Tools

&

Services

79,240

5,176,295

Jenoptik

AG

....................

Electronic

Equipment,

Instruments

&

Components

241,995

5,443,030

a,c

Montana

Aerospace

AG,

144A,

Reg

S

.

Aerospace

&

Defense

260,064

4,022,735

Rational

AG

....................

Machinery

8,080

4,710,335

Stabilus

SE

.....................

Machinery

118,285

5,813,715

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Germany

(continued)

a

VIA

Optronics

AG,

ADR

............

Electronic

Equipment,

Instruments

&

Components

269,509

$

571,359

31,488,280

Greece

0.8%

JUMBO

SA

.....................

Specialty

Retail

296,860

4,321,744

Hong

Kong

2.5%

Techtronic

Industries

Co.

Ltd.

.......

Machinery

133,000

1,388,798

Value

Partners

Group

Ltd.

..........

Capital

Markets

11,218,000

4,234,521

VTech

Holdings

Ltd.

..............

Communications

Equipment

944,800

7,440,283

13,063,602

Indonesia

0.9%

XL

Axiata

Tbk.

PT

................

Wireless

Telecommunication

Services

25,608,700

4,479,550

Israel

1.7%

a

Max

Stock

Ltd.

..................

Multiline

Retail

1,340,121

2,661,486

a

RADA

Electronic

Industries

Ltd.

......

Aerospace

&

Defense

635,800

5,874,792

8,536,278

Italy

7.0%

Brunello

Cucinelli

SpA

.............

Textiles,

Apparel

&

Luxury

Goods

77,568

3,503,306

Interpump

Group

SpA

.............

Machinery

190,678

7,300,405

MARR

SpA

.....................

Food

&

Staples

Retailing

295,251

4,076,606

Sanlorenzo

SpA

.................

Leisure

Products

281,560

9,462,702

a,b

Seco

SpA

......................

Technology

Hardware,

Storage

&

Peripherals

578,864

3,857,580

c

Technogym

SpA,

144A,

Reg

S

......

Leisure

Products

1,192,656

7,798,091

35,998,690

Japan

19.9%

Anicom

Holdings,

Inc.

.............

Insurance

705,200

3,366,930

Asics

Corp.

.....................

Textiles,

Apparel

&

Luxury

Goods

447,400

8,101,946

Bunka

Shutter

Co.

Ltd.

............

Building

Products

401,600

2,953,925

Dowa

Holdings

Co.

Ltd.

............

Metals

&

Mining

79,000

2,615,039

en

Japan,

Inc.

...................

Professional

Services

165,900

2,173,809

Fuji

Oil

Holdings,

Inc.

.............

Food

Products

324,400

5,126,078

Glory

Ltd.

......................

Machinery

244,700

3,691,614

Hosokawa

Micron

Corp.

...........

Machinery

149,500

2,867,543

Idec

Corp.

......................

Electrical

Equipment

235,300

4,858,678

IDOM,

Inc.

.....................

Specialty

Retail

849,000

4,683,619

Meitec

Corp.

....................

Professional

Services

539,100

8,689,130

Morinaga

&

Co.

Ltd.

..............

Food

Products

62,100

1,989,496

Nichiha

Corp.

...................

Building

Products

303,900

5,902,978

Nihon

Parkerizing

Co.

Ltd.

..........

Chemicals

305,200

2,009,088

Nissei

ASB

Machine

Co.

Ltd.

........

Machinery

178,200

4,641,765

Qol

Holdings

Co.

Ltd.

.............

Food

&

Staples

Retailing

522,900

5,430,913

Shima

Seiki

Manufacturing

Ltd.

......

Machinery

459,400

7,078,792

Square

Enix

Holdings

Co.

Ltd.

.......

Entertainment

58,700

2,605,023

TechnoPro

Holdings,

Inc.

..........

Professional

Services

323,000

6,482,730

Topcon

Corp.

...................

Electronic

Equipment,

Instruments

&

Components

406,700

5,317,774

Tsubakimoto

Chain

Co.

............

Machinery

128,300

2,874,842

Tsumura

&

Co.

..................

Pharmaceuticals

373,800

8,405,868

101,867,580

Netherlands

1.3%

c

Flow

Traders,

144A,

Reg

S

.........

Capital

Markets

235,894

6,767,471

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Norway

2.1%

a,b

PhotoCure

ASA

..................

Pharmaceuticals

441,918

$

4,613,339

TGS

ASA

......................

Energy

Equipment

&

Services

452,729

6,356,687

10,970,026

Philippines

0.9%

a

Century

Pacific

Food,

Inc.

..........

Food

Products

11,227,200

4,489,248

South

Korea

2.3%

BNK

Financial

Group,

Inc.

..........

Banks

703,065

3,674,526

DGB

Financial

Group,

Inc.

..........

Banks

943,393

5,579,515

Kyung

Dong

Navien

Co.

Ltd.

........

Building

Products

73,113

2,291,304

11,545,345

Spain

0.6%

Construcciones

y

Auxiliar

de

Ferrocarriles

SA

................

Machinery

113,180

3,341,311

Sweden

3.8%

Cloetta

AB,

B

...................

Food

Products

494,430

1,015,563

c

Dometic

Group

AB,

144A

..........

Auto

Components

717,546

4,232,573

Electrolux

Professional

AB,

B

.......

Machinery

770,413

4,141,904

Granges

AB

....................

Metals

&

Mining

706,193

5,304,908

c

Thule

Group

AB,

144A,

Reg

S

.......

Leisure

Products

191,923

4,747,539

19,442,487

Switzerland

4.0%

Bucher

Industries

AG

.............

Machinery

20,759

7,247,010

a,b

Landis+Gyr

Group

AG

.............

Electronic

Equipment,

Instruments

&

Components

84,906

4,456,665

Logitech

International

SA

..........

Technology

Hardware,

Storage

&

Peripherals

49,400

2,571,764

a

Siegfried

Holding

AG

..............

Life

Sciences

Tools

&

Services

8,691

5,566,796

a,b

Zur

Rose

Group

AG

..............

Food

&

Staples

Retailing

8,469

636,447

20,478,682

Taiwan

10.2%

Chicony

Electronics

Co.

Ltd.

........

Technology

Hardware,

Storage

&

Peripherals

2,660,037

6,632,417

Giant

Manufacturing

Co.

Ltd.

........

Leisure

Products

592,482

4,790,169

Johnson

Health

Tech

Co.

Ltd.

.......

Leisure

Products

1,891,000

3,474,788

King

Yuan

Electronics

Co.

Ltd.

......

Semiconductors

&

Semiconductor

Equipment

5,830,000

7,857,506

Merida

Industry

Co.

Ltd.

...........

Leisure

Products

702,000

6,032,627

Nan

Pao

Resins

Chemical

Co.

Ltd.

...

Chemicals

755,000

3,363,496

Nien

Made

Enterprise

Co.

Ltd.

......

Household

Durables

418,000

4,126,456

Primax

Electronics

Ltd.

............

Electronic

Equipment,

Instruments

&

Components

2,445,000

5,089,024

Shin

Zu

Shing

Co.

Ltd.

............

Machinery

1,010,000

2,780,668

Topkey

Corp.

...................

Leisure

Products

704,000

3,048,053

Tripod

Technology

Corp.

...........

Electronic

Equipment,

Instruments

&

Components

1,354,000

5,080,952

52,276,156

Thailand

0.9%

Hana

Microelectronics

PCL

.........

Electronic

Equipment,

Instruments

&

Components

4,061,200

4,711,797

United

Kingdom

9.6%

Coats

Group

plc

.................

Textiles,

Apparel

&

Luxury

Goods

3,760,058

2,855,792

Greggs

plc

.....................

Hotels,

Restaurants

&

Leisure

201,723

4,466,153

c

Ibstock

plc,

144A,

Reg

S

...........

Construction

Materials

2,938,324

5,918,900

a

Johnson

Service

Group

plc

.........

Commercial

Services

&

Supplies

1,910,765

2,315,938

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

Kingdom

(continued)

Man

Group

plc

..................

Capital

Markets

3,414,802

$

10,422,764

Oxford

Instruments

plc

............

Electronic

Equipment,

Instruments

&

Components

190,914

4,644,360

Pagegroup

plc

..................

Professional

Services

979,200

4,795,347

Rathbones

Group

plc

.............

Capital

Markets

306,358

7,241,103

VIDENDUM

plc

..................

Household

Durables

27,500

441,450

a,c

Watches

of

Switzerland

Group

plc,

144A

Specialty

Retail

628,482

5,954,797

49,056,604

United

States

1.6%

Axis

Capital

Holdings

Ltd.

..........

Insurance

59,230

3,381,441

a

IMAX

Corp.

.....................

Entertainment

294,200

4,969,038

8,350,479

Total

Common

Stocks

(Cost

$483,493,295)

.....................................

494,410,514

Warrants

a

a

a

a

a

Warrants

0.1%

Bahamas

0.1%

a

OneSpaWorld

Holdings

Ltd.

,

3/19/24

..

Diversified

Consumer

Services

202,835

237,317

a

OneSpaWorld

Holdings

Ltd.

,

3/19/24

..

Diversified

Consumer

Services

59,949

70,140

307,457

Total

Warrants

(Cost

$221,371)

................................................

307,457

Total

Long

Term

Investments

(Cost

$483,714,666)

...............................

494,717,971

Short

Term

Investments

3.0%

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

2.0%

United

States

2.0%

d

FHLB,

7/01/22

..................

10,100,000

10,100,000

Total

U.S.

Government

and

Agency

Securities

(Cost

$10,100,000)

.................

10,100,000

Shares

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.0%

Money

Market

Funds

1.0%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

.........

5,299,557

5,299,557

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$5,299,557)

.................................................................

5,299,557

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$15,399,557

)

................................

15,399,557

a

a

a

Total

Investments

(Cost

$499,114,223)

99.6%

...................................

$510,117,528

Other

Assets,

less

Liabilities

0.4%

.............................................

1,944,238

Net

Assets

100.0%

...........................................................

$512,061,766

a

a

a

See

Abbreviations

on

page

43

.

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2022.

See

Note

1(d).

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2022,

the

aggregate

value

of

these

securities

was

$47,386,893,

representing

9.3%

of

net

assets.

d

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

e

See

Note

1(d)

regarding

securities

on

loan.

f

See

Note

3(d)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Templeton

Institutional

Funds

Financial

Highlights

International

Equity

Series

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

Six

Months

Ended

June

30,

2022

(unaudited)

Year

Ended

December

31,

2021

2020

2019

2018

2017

Primary

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.96

$15.22

$15.54

$14.87

$21.99

$18.65

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.15

0.26

1.03

c

0.64

0.42

0.45

Net

realized

and

unrealized

gains

(losses)

(1.74)

0.55

(0.32)

1.06

(3.66)

3.81

Total

from

investment

operations

........

(1.59)

0.81

0.71

1.70

(3.24)

4.26

Less

distributions

from:

Net

investment

income

..............

—

(1.46)

(0.67)

(1.02)

(0.42)

(0.64)

Net

realized

gains

.................

—

(2.61)

(0.36)

(0.01)

(3.46)

(0.28)

Total

distributions

...................

—

(4.07)

(1.03)

(1.03)

(3.88)

(0.92)

Net

asset

value,

end

of

period

..........

$10.37

$11.96

$15.22

$15.54

$14.87

$21.99

Total

return

d

.......................

(13.29)%

5.75%

5.30%

11.57%

(14.87)%

22.92%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.97%

0.94%

0.87%

0.82%

0.80%

0.78%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.92%

0.91%

0.84%

0.82%

f

0.80%

f,g

0.78%

f

Net

investment

income

...............

2.65%

1.64%

7.51%

c

4.13%

1.98%

2.13%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$213,803

$386,291

$447,139

$1,695,980

$2,785,308

$4,412,494

Portfolio

turnover

rate

................

21.22%

44.73%

89.34%

36.83%

h

25.60%

h

16.39%

h

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.77

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.86%

and

total

return

would

have

been

(0.03)%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Templeton

Institutional

Funds

Financial

Highlights

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

23

a

Six

Months

Ended

June

30,

2022

(unaudited)

Year

Ended

December

31,

2021

2020

2019

2018

2017

Service

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$12.24

$15.48

$15.79

$14.97

$22.07

$18.72

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.10

0.24

1.17

c

0.98

0.38

0.39

Net

realized

and

unrealized

gains

(losses)

(1.75)

0.58

(0.47)

0.70

(3.66)

3.85

Total

from

investment

operations

........

(1.65)

0.82

0.70

1.68

(3.28)

4.24

Less

distributions

from:

Net

investment

income

..............

—

(1.45)

(0.65)

(0.85)

(0.36)

(0.61)

Net

realized

gains

.................

—

(2.61)

(0.36)

(0.01)

(3.46)

(0.28)

Total

distributions

...................

—

(4.06)

(1.01)

(0.86)

(3.82)

(0.89)

Net

asset

value,

end

of

period

..........

$10.59

$12.24

$15.48

$15.79

$14.97

$22.07

Total

return

d

.......................

(13.48)%

5.69%

5.16%

11.34%

(15.01)%

22.73%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.10%

1.04%

1.01%

0.97%

0.95%

0.93%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.06%

1.00%

0.98%

0.97%

f

0.95%

f,g

0.93%

f

Net

investment

income

...............

1.68%

1.52%

8.42%

c

3.98%

1.83%

1.98%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$130

$521

$448

$700

$5,375

$14,164

Portfolio

turnover

rate

................

21.22%

44.73%

89.34%

36.83%

h

25.60%

h

16.39%

h

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.78

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

2.77%

and

total

return

would

have

been

(0.14)%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited),

June

30,

2022

International

Equity

Series

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

a

Industry

Shares

a

Value

a

Common

Stocks

97.3%

Belgium

1.7%

Anheuser-Busch

InBev

SA/NV

......

Beverages

66,905

$

3,602,793

Brazil

1.8%

Wheaton

Precious

Metals

Corp.

.....

Metals

&

Mining

108,181

3,897,945

Canada

2.9%

Barrick

Gold

Corp.

...............

Metals

&

Mining

138,000

2,441,220

GFL

Environmental,

Inc.

...........

Commercial

Services

&

Supplies

144,500

3,728,100

6,169,320

China

1.2%

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

17,296

2,560,327

France

10.9%

Cie

de

Saint-Gobain

..............

Building

Products

39,392

1,702,017

Danone

SA

.....................

Food

Products

71,802

4,020,877

Eiffage

SA

......................

Construction

&

Engineering

41,140

3,721,347

TotalEnergies

SE

................

Oil,

Gas

&

Consumable

Fuels

175,767

9,251,400

a

Veolia

Environnement

SA

..........

Multi-Utilities

187,554

4,597,351

23,292,992

Germany

14.5%

adidas

AG

......................

Textiles,

Apparel

&

Luxury

Goods

11,649

2,069,125

Bayer

AG

......................

Pharmaceuticals

42,191

2,519,374

Continental

AG

..................

Auto

Components

50,950

3,575,947

Deutsche

Boerse

AG

..............

Capital

Markets

24,341

4,087,310

Deutsche

Telekom

AG

.............

Diversified

Telecommunication

Services

417,690

8,307,148

E.ON

SE

.......................

Multi-Utilities

535,554

4,510,797

b

Fresenius

Medical

Care

AG

&

Co.

KGaA

Health

Care

Providers

&

Services

61,683

3,090,239

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

114,111

2,775,677

30,935,617

Hungary

0.9%

Richter

Gedeon

Nyrt.

.............

Pharmaceuticals

110,009

1,990,673

Ireland

3.2%

CRH

plc

.......................

Construction

Materials

103,467

3,570,353

a

ICON

plc

.......................

Life

Sciences

Tools

&

Services

14,900

3,228,830

6,799,183

Japan

13.7%

Hitachi

Ltd.

.....................

Industrial

Conglomerates

95,000

4,518,324

Honda

Motor

Co.

Ltd.

.............

Automobiles

165,200

3,982,420

Isuzu

Motors

Ltd.

................

Automobiles

367,800

4,067,628

Komatsu

Ltd.

...................

Machinery

164,300

3,657,822

Sony

Group

Corp.

................

Household

Durables

52,300

4,264,634

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

101,500

3,146,359

Sumitomo

Mitsui

Financial

Group,

Inc.

.

Banks

188,000

5,587,289

29,224,476

Netherlands

6.3%

ING

Groep

NV

..................

Banks

425,404

4,190,712

Shell

plc

.......................

Oil,

Gas

&

Consumable

Fuels

354,644

9,234,399

13,425,111

Singapore

1.9%

United

Overseas

Bank

Ltd.

.........

Banks

214,700

4,055,995

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

25

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

South

Korea

4.9%

KB

Financial

Group,

Inc.

...........

Banks

74,524

$

2,803,508

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

126,793

5,633,768

Shinhan

Financial

Group

Co.

Ltd.

....

Banks

75,039

2,167,580

10,604,856

Spain

1.4%

Red

Electrica

Corp.

SA

............

Electric

Utilities

163,977

3,103,868

Switzerland

1.9%

Adecco

Group

AG

................

Professional

Services

121,013

4,125,357

Taiwan

2.0%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

268,492

4,303,744

Thailand

1.2%

Kasikornbank

PCL

...............

Banks

579,700

2,477,615

United

Kingdom

22.7%

AstraZeneca

plc

.................

Pharmaceuticals

39,977

5,272,971

BAE

Systems

plc

................

Aerospace

&

Defense

601,974

6,093,380

BP

plc

.........................

Oil,

Gas

&

Consumable

Fuels

1,788,932

8,398,541

Compass

Group

plc

..............

Hotels,

Restaurants

&

Leisure

133,400

2,738,437

DS

Smith

plc

....................

Containers

&

Packaging

887,082

3,003,895

a

Informa

plc

.....................

Media

363,950

2,350,954

a,b

International

Consolidated

Airlines

Group

SA

.....................

Airlines

1,560,685

2,052,724

a,c

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...........................

Internet

&

Direct

Marketing

Retail

42,056

660,812

Lloyds

Banking

Group

plc

..........

Banks

11,347,221

5,837,262

Smith

&

Nephew

plc

..............

Health

Care

Equipment

&

Supplies

317,782

4,443,383

Standard

Chartered

plc

............

Banks

646,912

4,882,993

a

WH

Smith

plc

...................

Specialty

Retail

165,954

2,852,180

48,587,532

United

States

4.2%

GSK

plc

.......................

Pharmaceuticals

228,104

4,915,198

Roche

Holding

AG

...............

Pharmaceuticals

11,932

3,989,493

8,904,691

Total

Common

Stocks

(Cost

$186,673,515)

.....................................

208,062,095

a

a

a

a

a

Escrows

and

Litigation

Trusts

0.0%

a,d

Hemisphere

Properties

India

Ltd.,

Escrow

Account

................

2,094,964

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$186,673,515)

...............................

208,062,095

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

International

Equity

Series

(continued)

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

Short

Term

Investments

3.1%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

2.1%

United

States

2.1%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

.........

4,404,233

$

4,404,233

Total

Money

Market

Funds

(Cost

$4,404,233)

...................................

4,404,233

g

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.0%

Money

Market

Funds

1.0%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

.........

2,189,708

2,189,708

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$2,189,708)

.................................................................

2,189,708

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$6,593,941

)

.................................

6,593,941

a

a

a

Total

Investments

(Cost

$193,267,456)

100.4%

..................................

$214,656,036

Other

Assets,

less

Liabilities

(0.4)%

...........................................

(723,268)

Net

Assets

100.0%

...........................................................

$213,932,768

a

a

a

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2022.

See

Note

1(d).

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2022,

the

value

of

this

security

was

$660,812,

representing

0.3%

of

net

assets.

d

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

e

See

Note

3(d)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

g

See

Note

1(d)

regarding

securities

on

loan.

Templeton

Institutional

Funds

Schedule

of

Investments

(unaudited)

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

27

At

June

30,

2022,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Equity

contracts

MSCI

EAFE

Index

............................

Long

20

$

1,856,600

9/16/22

$

(9,431)

Total

Futures

Contracts

......................................................................

$(9,431)

*

As

of

period

end.

See

Note 6 regarding

other

derivative

information.

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Assets

and

Liabilities

June

30,

2022

(unaudited)

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

Foreign

Smaller

Companies

Series

International

Equity

Series

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

..................................................

$493,814,666

$186,673,515

Cost

-

Non-controlled

affiliates

(No

te

3d)

.......................................

5,299,557

6,593,941

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$18,456,173

and

$2,075,335

respectively)

............................................................

$504,817,971

$208,062,095

Value

-

Non-controlled

affiliates

(Not

e

3d)

......................................

5,299,557

6,593,941

Cash

...................................................................

6,718,145

—

Foreign

currency,

at

value

(cost

$22

and

$157

respectively)

..........................

22

154

Receivables:

Investment

securities

sold

..................................................

79,351

50,209

Capital

shares

sold

.......................................................

48,204

23,012

Dividends

..............................................................

1,577,455

3,759,511

European

Union

tax

reclaims

(Note

1

e

)

........................................

—

475,618

Deposits

with

brokers

for:

Futures

contracts

.......................................................

—

110,117

Total

assets

.........................................................

518,540,705

219,074,657

Liabilities:

Payables:

Investment

securities

purchased

.............................................

207,400

164

Capital

shares

redeemed

..................................................

377,482

74,510

Management

fees

........................................................

430,894

138,787

Transfer

agent

fees

.......................................................

7,291

9,446

Trustees'

fees

and

expenses

................................................

25,293

86,720

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

............

—

2,240,021

Variation

margin

on

futures

contracts

..........................................

—

7,797

Payable

upon

return

of

securities

loaned

(Note

1

d

)

.................................

5,299,557

2,189,708

Accrued

expenses

and

other

liabilities

..........................................

131,022

394,736

Total

liabilities

........................................................

6,478,939

5,141,889

Net

assets,

at

value

................................................

$512,061,766

$213,932,768

Net

assets

consist

of:

Paid-in

capital

............................................................

$492,267,076

$176,353,482

Total

distributable

earnings

(losses)

............................................

19,794,690

37,579,286

Net

assets,

at

value

................................................

$512,061,766

$213,932,768

Shares

outstanding

........................................................

30,949,511

Net

asset

value

per

share

...................................................

$16.54

International

Equity

Series

Primary

Shares:

Net

assets,

at

value

.......................................................................

$213,802,730

Shares

outstanding

........................................................................

20,624,986

Net

asset

value

per

share

...................................................................

$10.37

Service

Shares:

Net

assets,

at

value

.......................................................................

$130,038

Shares

outstanding

........................................................................

12,276

Net

asset

value

per

share

...................................................................

$10.59

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Operations

for

the

six

months

ended

June

30,

2022

(unaudited)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

29

Foreign

Smaller

Companies

Series

International

Equity

Series

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$994,692

and

$592,912,

respectively)

Unaffiliated

issuers

.......................................................

$7,862,357

$5,878,201

Non-controlled

affiliates

(Not

e

3d)

............................................

—

6,210

Interest:

Unaffiliated

issuers

.......................................................

22,355

112

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

....................................

41,527

3,237

Non-controlled

affiliates

(Note

3

d

)

............................................

4,271

1,603

Other

income

(Note

1

e

)

.....................................................

2,604

—

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

.........

—

(40,485)

Total

investment

income

..................................................

7,933,114

5,848,878

Expenses:

Management

fees

(Note

3

a

)

..................................................

2,909,689

1,269,144

Transfer

agent

fees:

(Note

3c

)

    Primary

Shares

.........................................................

—

50,595

    Service

Shares

.........................................................

—

114

Transfer

agent

fees

(Note

3

c

)

.................................................

78,218

—

Sub-transfer

agent

fees:

(Note

3c

)

    Service

Shares

.........................................................

—

147

Custodian

fees

...........................................................

39,374

8,119

Reports

to

shareholders

fees

.................................................

12,330

15,246

Registration

and

filing

fees

...................................................

17,881

22,653

Professional

fees

..........................................................

57,901

101,958

Trustees'

fees

and

expenses

.................................................

22,776

2,073

Other

...................................................................

40,296

111,037

Total

expenses

........................................................

3,178,465

1,581,086

Expenses

waived/paid

by

affiliates

(Note

3

d

and

3

e

)

.............................

(1,441)

(67,727)

Net

expenses

........................................................

3,177,024

1,513,359

Net

investment

income

...............................................

4,756,090

4,335,519

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

.....................................................

10,877,635

15,943,265

Foreign

currency

transactions

...............................................

(204,463)

(211,740)

Futures

contracts

........................................................

—

(552,999)

Net

realized

gain

(loss)

.................................................

10,673,172

15,178,526

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

.....................................................

(187,108,017)

(58,309,487)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

.............

(17,995)

(235,330)

Futures

contracts

........................................................

—

(47,300)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(187,126,012)

(58,592,117)

Net

realized

and

unrealized

gain

(loss)

...........................................

(176,452,840)

(43,413,591)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.........................

$(171,696,750)

$(39,078,072)

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

ftinstitutional.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

Foreign

Smaller

Companies

Series

International

Equity

Series

Six

Months

Ended

June

30,

2022

(unaudited)

Year

Ended

December

31,

2021

Six

Months

Ended

June

30,

2022

(unaudited)

Year

Ended

December

31,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$4,756,090

$8,456,771

$4,335,519

$7,395,973

Net

realized

gain

(loss)

............

10,673,172

105,168,552

15,178,526

38,871,211

Net

change

in

unrealized

appreciation

(depreciation)

.................

(187,126,012)

(37,526,164)

(58,592,117)

(19,828,202)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

(171,696,750)

76,099,159

(39,078,072)

26,438,982

Distributions

to

shareholders:

Primary

Shares

..................

—

—

—

(110,460,144)

Service

Shares

..................

—

—

—

(166,811)

Distributions

to

shareholders

.........

—

(105,430,343)

—

—

Total

distributions

to

shareholders

.....

—

(105,430,343)

—

(110,626,955)

Capital

share

transactions:

(Note

2

)

Primary

Shares

..................

—

—

(133,429,576)

23,198,093

Service

Shares

..................

—

—

(371,635)

215,336

Capital

share

transactions

(Note

2

)

.....

(55,958,874)

43,950,886

—

—

Total

capital

share

transactions

.......

(55,958,874)

43,950,886

(133,801,211)

23,413,429

Net

increase

(decrease)

in

net

assets

.....................

(227,655,624)

14,619,702

(172,879,283)

(60,774,544)

Net

assets:

Beginning

of

period

................

739,717,390

725,097,688

386,812,051

447,586,595

End

of

period

.....................

$512,061,766

$739,717,390

$213,932,768

$386,812,051

Templeton

Institutional

Funds

31

ftinstitutional.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

1.

Organization

and

Significant

Accounting

Policies

Templeton

Institutional

Funds (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

two

separate

funds

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

International

Equity

Series

offers

Primary

Shares

and

Service

Shares.

Each

class

of

shares

may

differ

by

its initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the

OTC

market

rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value. 

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Funds'

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Funds.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

32

ftinstitutional.com

Semiannual

Report

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Funds'

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2022,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

for

financial

reporting

purposes. 

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Funds

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

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.

The

Funds

do

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statements

of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Derivative

Financial

Instruments

Certain

or

all

Funds

invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Funds

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

Certain

or

all

Funds

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

equity

price

risk.

A

futures

contract

is

an

agreement

between

the

Funds

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Funds,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable.

See

Note

6

regarding

other

derivative

information.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

33

ftinstitutional.com

Semiannual

Report

d.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Funds

receive

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds.

Additionally,

the

Foreign

Smaller

Companies

Series

and

International

Equity

Series

held

$15,134,752

and

$134,960,

respectively

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities held

as

collateral.

As

such,

the

non-

cash

collateral

is

excluded

from

the

Statements

of

Assets

and

Liabilities. The

Funds

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-

party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Funds

bear

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Funds.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Funds

have

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Funds

in

the

event

of

default

by

a

third

party

borrower.

e.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and

excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Funds

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

certain

or

all

Funds

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statements of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statements

of

Assets

and

Liabilities.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Funds,

if

any,

reduce

the

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their income

tax

returns.

In

the

event

that

EU

reclaims

received

by

the

Funds during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Funds,

and

the Funds

previously

passed through

to

its

shareholders

foreign

taxes

incurred

by

the

Funds

to

be

used

as

a

credit

or

deduction

on

a

shareholder’s

income

tax

return,

the

Funds will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Funds'

shareholders.

International

Equity

Series

determined

to

enter

into

a

closing

agreement

with

the

IRS

and

recorded

the

estimated

payments

as

a

reduction

to

income,

as

reflected

in

the

Statements

of

Operations.

Each

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2022, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

1.

Organization

and

Significant

Accounting

Policies

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

34

ftinstitutional.com

Semiannual

Report

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Funds

invest. 

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Funds.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

g.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Income

and

Deferred

Taxes

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

35

ftinstitutional.com

Semiannual

Report

2.

Shares

of

Beneficial

Interest

At

June

30,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds’

shares

were

as

follows:

Foreign

Smaller

Companies

Series

Shares

Amount

Advisor

Class

Six

Months

ended

June

30,

2022

Shares

sold

...................................

2,633,223

$49,796,291

Shares

redeemed

...............................

(5,619,986)

(105,755,165)

Net

increase

(decrease)

..........................

(2,986,763)

$(55,958,874)

Year

ended

December

31,

2021

Shares

sold

...................................

4,047,399

$101,195,141

Shares

issued

in

reinvestment

of

distributions

..........

4,379,342

92,550,331

Shares

redeemed

...............................

(5,981,276)

(149,794,586)

Net

increase

(decrease)

..........................

2,445,465

$43,950,886

International

Equity

Series

Shares

Amount

Primary

Shares

Primary

Shares:

Six

Months

ended

June

30,

2022

Shares

sold

...................................

2,982,543

$35,629,158

Shares

redeemed

...............................

(14,646,650)

(169,058,734)

Net

increase

(decrease)

..........................

(11,664,107)

$(133,429,576)

Year

ended

December

31,

2021

Shares

sold

...................................

4,888,882

$77,425,011

Shares

issued

in

reinvestment

of

distributions

..........

7,487,110

94,340,837

Shares

redeemed

...............................

(9,461,057)

(148,567,755)

Net

increase

(decrease)

..........................

2,914,935

$23,198,093

Service

Shares

Service

Shares:

Six

Months

ended

June

30,

2022

Shares

sold

...................................

2,849

$36,509

Shares

redeemed

...............................

(33,164)

(408,144)

Net

increase

(decrease)

..........................

(30,315)

$(371,635)

Year

ended

December

31,

2021

Shares

sold

...................................

19,254

$316,394

Shares

issued

in

reinvestment

of

distributions

..........

12,776

166,811

Shares

redeemed

...............................

(18,345)

(267,869)

Net

increase

(decrease)

..........................

13,685

$215,336

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

36

ftinstitutional.com

Semiannual

Report

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

Foreign

Smaller

Companies

Series

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

International

Equity

Series

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2022,

each

Fund's

annualized

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

Under

a

subadvisory

agreement,

FTIC,

an

affiliate

of

TIC,

provides

subadvisory

services

to

Foreign

Smaller

Companies

Series.

The

subadvisory

fee

is

paid

by

TIC

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

Subsidiary

Affiliation

Templeton

Investment

Counsel,

LLC

(TIC)

Investment

manager

Franklin

Templeton

Investments

Corp.

(FTIC)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.950%

Up

to

and

including

$1

billion

0.930%

Over

$1

billion,

up

to

and

including

$5

billion

0.910%

Over

$5

billion,

up

to

and

including

$10

billion

0.890%

Over

$10

billion,

up

to

and

including

$15

billion

0.870%

Over

$15

billion,

up

to

and

including

$20

billion

0.850%

In

excess

of

$20

billion

Annualized

Fee

Rate

Net

Assets

0.775%

Up

to

and

including

$1

billion

0.755%

Over

$1

billion,

up

to

and

including

$5

billion

0.735%

Over

$5

billion,

up

to

and

including

$10

billion

0.715%

Over

$10

billion,

up

to

and

including

$15

billion

0.695%

Over

$15

billion,

up

to

and

including

$20

billion

0.675%

In

excess

of

$20

billion

Foreign

Smaller

Companies

Series

International

Equity

Series

Gross

effective

investment

management

fee

rate

........

0.950%

0.775%

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

37

ftinstitutional.com

Semiannual

Report

b.

Administrative

Fees

Under

an

agreement

with

TIC,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

TIC

based

on

each

of

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

For

the

period

ended

June

30,

2022,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

International

Equity

Series’

Service

shares

may

pay

up

to

0.15%

of

average

daily

net

assets

for

sub-transfer

agency

fees

as

noted

in

the

Statements

of

Operations.

d.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

period

ended

June

30,

2022,

investments

in

affiliated

management

investment

companies

were

as

follows:

Foreign

Smaller

Companies

Series

International

Equity

Series

Transfer

agent

fees

........................

$77,667

$46,626

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Foreign

Smaller

Companies

Series

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

$9,593,212

$61,440,487

$(65,734,142)

$—

$—

$5,299,557

5,299,557

$4,271

Total

Affiliated

Securities

...

$9,593,212

$61,440,487

$(65,734,142)

$—

$—

$5,299,557

$4,271

3.

Transactions

with

Affiliates

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

38

ftinstitutional.com

Semiannual

Report

e.

Waiver

and

Expense

Reimbursements

TIC

has

contractually

agreed

in

advance

to

limit

the

investment

management

fees

for

International

Equity

Series

to

0.74%

of

the

average

daily

net

assets

of

the

Fund

until

April

30,

2023.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

4.

Income

Taxes

For

tax

purposes,

the

Funds

may

elect

to

defer

any

portion

of

a

post-October

capital

loss

or

late-year

ordinary

loss

to

the

first

day

of

the

following

fiscal

year.

At

December

31,

2021,

International

Equity

Series

deferred

post-October

capital

losses

of

$1,722,185.

At

June

30,

2022,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

EU

reclaims,

passive

foreign

investment

company

shares,

foreign

currency

transactions

and

wash

sales.

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

International

Equity

Series

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

$

5,153,549

$

80,977,870

$

(81,727,186)

$

—

$

—

$

4,404,233

4,404,233

$

6,210

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.895%

$—

$14,409,702

$(12,219,994)

$—

$—

$2,189,708

2,189,708

$1,603

Total

Affiliated

Securities

...

$5,153,549

$95,387,572

$(93,947,180)

$—

$—

$6,593,941

$7,813

Foreign

Smaller

Companies

Series

International

Equity

Series

a

a

a

Cost

of

investments

.......................

$508,782,029

$201,753,409

Unrealized

appreciation

.....................

$97,042,706

$39,993,897

Unrealized

depreciation

.....................

(95,707,207)

(27,100,701)

Net

unrealized

appreciation

(depreciation)

.......

$1,335,499

$12,893,196

3.

Transactions

with

Affiliates

(continued)

d.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

39

ftinstitutional.com

Semiannual

Report

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2022,

were

as

follows:

At

June

30,

2022,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

6.

Other

Derivative

Information

At

June

30,

2022,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

Foreign

Smaller

Companies

Series

International

Equity

Series

Purchases

..............................

$39,834,919

$66,303,816

Sales

..................................

$80,170,671

$193,780,160

Foreign

Smaller

Companies

Series

International

Equity

Series

Securities

lending

transactions

a

:

Equity

investments

b

........................

$5,299,557

$2,189,708

a

The

agreements

can

be

terminated

at

any

time.

b

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statements

of

Assets

and

Liabilities.

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

International

Equity

Series

Equity

contracts

...........

Variation

margin

on

futures

contracts

$

—

Variation

margin

on

futures

contracts

$

9,431

a

Total

....................

$—

$9,431

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Schedule

of

Investments.

Only

the

variation

margin

receivable/payable

at

period

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

40

ftinstitutional.com

Semiannual

Report

For

the

period

ended

June

30,

2022,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

period

ended

June

30,

2022,

the

average

month

end

notional

amount

of

futures

contracts

was

$2,107,357.

See

Note

1(c) regarding

derivative

financial

instruments. 

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Funds

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

10.

Credit

Facility

The

Funds,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

3,

2023.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Period

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Period

International

Equity

Series

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

..............

Futures

contracts

$(552,999)

Futures

contracts

$(47,300)

Total

.......................

$(552,999)

$(47,300)

6.

Other

Derivative

Information

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

41

ftinstitutional.com

Semiannual

Report

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

period ended

June

30,

2022,

the

Funds

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2022,

in

valuing

the

Funds'

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Foreign

Smaller

Companies

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Austria

...............................

$

—

$

8,506,503

$

—

$

8,506,503

Bahamas

.............................

5,281,458

—

—

5,281,458

Belgium

..............................

—

19,926,145

—

19,926,145

Brazil

................................

12,072,345

—

—

12,072,345

Canada

..............................

17,685,170

—

—

17,685,170

China

...............................

—

19,257,287

—

19,257,287

Denmark

.............................

—

2,638,033

—

2,638,033

Finland

..............................

4,578,962

11,969,747

—

16,548,709

France

...............................

—

1,309,534

—

1,309,534

Germany

.............................

571,359

30,916,921

—

31,488,280

Greece

..............................

—

4,321,744

—

4,321,744

Hong

Kong

...........................

—

13,063,602

—

13,063,602

Indonesia

............................

—

4,479,550

—

4,479,550

Israel

................................

5,874,792

2,661,486

—

8,536,278

Italy

.................................

—

35,998,690

—

35,998,690

Japan

...............................

—

101,867,580

—

101,867,580

Netherlands

...........................

—

6,767,471

—

6,767,471

Norway

..............................

—

10,970,026

—

10,970,026

Philippines

............................

4,489,248

—

—

4,489,248

South

Korea

..........................

—

11,545,345

—

11,545,345

Spain

................................

—

3,341,311

—

3,341,311

Sweden

..............................

4,141,904

15,300,583

—

19,442,487

Switzerland

...........................

2,571,764

17,906,918

—

20,478,682

Taiwan

...............................

—

52,276,156

—

52,276,156

10.

Credit

Facility

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

42

ftinstitutional.com

Semiannual

Report

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

12.

New

Accounting

Pronouncements

In June

2022,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

Level

1

Level

2

Level

3

Total

Foreign

Smaller

Companies

Series

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Thailand

.............................

$

—

$

4,711,797

$

—

$

4,711,797

United

Kingdom

........................

7,241,103

41,815,501

—

49,056,604

United

States

..........................

8,350,479

—

—

8,350,479

Warrants

..............................

307,457

—

—

307,457

Short

Term

Investments

...................

5,299,557

10,100,000

—

15,399,557

Total

Investments

in

Securities

...........

$78,465,598

$431,651,930

a

$—

$510,117,528

International

Equity

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Belgium

..............................

—

3,602,793

—

3,602,793

Brazil

................................

3,897,945

—

—

3,897,945

Canada

..............................

6,169,320

—

—

6,169,320

China

...............................

2,560,327

—

—

2,560,327

France

...............................

—

23,292,992

—

23,292,992

Germany

.............................

—

30,935,617

—

30,935,617

Hungary

.............................

—

1,990,673

—

1,990,673

Ireland

...............................

3,228,830

3,570,353

—

6,799,183

Japan

...............................

—

29,224,476

—

29,224,476

Netherlands

...........................

—

13,425,111

—

13,425,111

Singapore

............................

—

4,055,995

—

4,055,995

South

Korea

..........................

—

10,604,856

—

10,604,856

Spain

................................

—

3,103,868

—

3,103,868

Switzerland

...........................

—

4,125,357

—

4,125,357

Taiwan

...............................

—

4,303,744

—

4,303,744

Thailand

.............................

—

2,477,615

—

2,477,615

United

Kingdom

........................

—

48,587,532

—

48,587,532

United

States

..........................

—

8,904,691

—

8,904,691

Escrows

and

Litigation

Trusts

...............

—

—

—

b

—

Short

Term

Investments

...................

6,593,941

—

—

6,593,941

Total

Investments

in

Securities

...........

$22,450,363

$192,205,673

c

$—

$214,656,036

Liabilities:

Other

Financial

Instruments:

Futures

contracts

........................

$

9,431

$

—

$

—

$

9,431

a

Includes

foreign

securities

valued

at

$421,551,930,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

b

Includes

securities

determined

to

have

no

value

at

June

30,

2022.

c

Includes

foreign

securities

valued

at

$192,205,673,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

11.

Fair

Value

Measurements

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

(unaudited)

43

ftinstitutional.com

Semiannual

Report

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

is

currently

evaluating

the

impact,

if

any,

of

applying

this

ASU.

13.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

FHLB

Federal

Home

Loan

Banks

12.

New

Accounting

Pronouncements

(continued)

Templeton

Institutional

Funds

Shareholder

Information

44

ftinstitutional.com

Semiannual

Report

Board

Approval

of

Investment

Management

Agreements

TEMPLETON

INSTITUTIONAL

FUNDS

Foreign

Smaller

Companies

Series

International

Equity

Series

(each

a

Fund)

At

an

in-person

meeting

held

on

February

28,

2022

(Meeting),

the

Board

of

Trustees

(Board)

of

Templeton

Institutional

Funds

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Templeton

Investment

Counsel,

LLC

(TICL)

and

the

Trust,

on

behalf

of

each

Fund,

and

an

investment

sub-advisory

agreement

between

TICL

and

Franklin

Templeton

Investments

Corp.

(Sub-Adviser),

an

affiliate

of

TICL,

on

behalf

of

the

Foreign

Smaller

Companies

Series,

for

an

additional

one-year

period

(each

a

Management

Agreement).

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

Although

the

Management

Agreements

for

the

Funds

were

considered

at

the

same

Board

meeting,

the

Board

considered

the

information

provided

to

it

about

the

Funds

together

and

with

respect

to

each

Fund

separately

as

the

Board

deemed

appropriate.

TICL

and

the

Sub-Adviser

are

each

referred

to

herein

as

a

Manager.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

each

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Managers

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

virtual

contract

renewal

meeting

at

which

the

Independent

Trustees

first

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters;

then

met

with

senior

leadership

regarding

the

performance

of

the

global

equity

funds,

as

well

as

expected

enhancements

to

the

Templeton

Global

Equity

Group

leadership;

and

last

met

with

management

to

request

additional

information

that

the

Independent

Trustees

reviewed

and

considered

at

the

Meeting.

The

Board

later

had

an

opportunity

for

an

expanded

discussion

with

the

leadership

of

the

Templeton

Global

Equity

Group

to

hear

about

strategies

to

deliver

improved

investment

returns

to

shareholders.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

each

Manager;

(ii)

the

investment

performance

of

each

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

each

Manager

and

its

affiliates

from

the

relationship

with

each

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

each

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

each

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

applicable

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

each

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

each

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

each

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

each

Manager

and

its

affiliates;

and

management

fees

charged

by

each

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Funds

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-

party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Funds.

The

Board

noted

management’s

continued

focus

on

enhancing

the

leadership

of

the

Templeton

Global

Equity

Group

Templeton

Institutional

Funds

Shareholder

Information

45

ftinstitutional.com

Semiannual

Report

and

commitment

to

providing

the

resources

important

to

delivering

sustainable

returns.

The

Board

also

acknowledged

the

ongoing

integration

of

the

Legg

Mason

family

of

funds

into

the

FT

family

of

funds

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

including

various

regulatory

initiatives

and

recent

geopolitical

concerns.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Managers’

parent,

and

its

commitment

to

the

mutual

fund

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Funds

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

being

a

global

leader

in

stewardship

and

sustainability

and

the

recent

addition

of

a

senior

executive

focused

on

environmental,

social

and

governance

and

climate

control

initiatives.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

each

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

each

Fund

over

various

time

periods

ended

November

30,

2021.

The

Board

considered

the

performance

returns

for

each

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

considered

the

performance

returns

for

the

Foreign

Smaller

Companies

Series

in

comparison

to

the

performance

returns

of

a

customized

peer

group

(Performance

Customized

Peer

Group)

selected

by

TICL.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

each

Fund’s

performance

results

is

below.

Foreign

Smaller

Companies

Series

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

international

small-/mid-cap

growth

funds.

The

Performance

Customized

Peer

Group

for

the

Fund

included

funds

that

are

value

style

and

have

80%

of

the

portfolio

market

value

invested

in

non-US

securities

with

a

market

capitalization

of

less

than

$4

billion.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

discussed

the

performance

of

the

Fund

with

management

and

management

explained

that

Broadridge

has

categorized

the

Fund

in

Broadridge’s

growth

category,

whereas

management’s

investment

process

focuses

on

longer-term

valuations.

Management

also

explained

that

the

foregoing

is

the

reason

management

asked

Broadridge

to

include

the

Performance

Customized

Peer

Group,

which

is

comprised

of

15

funds,

14

of

which

have

a

value

style.

Management

noted

that

the

Fund’s

performance

had

recently

improved,

ranking

in

the

18

th

percentile

of

the

Performance

Universe

for

the

one-month

period

ended

January

31,

2022.

The

Board

noted

that,

while

the

Fund’s

annualized

total

return

was

below

the

median

of

its

Performance

Universe

for

each

reporting

period

and

below

the

median

of

its

Performance

Customized

Peer

Group

for

the

one-

and

three-year

periods,

the

Fund’s

annualized

total

return

was

above

the

median

of

its

Performance

Customized

Peer

Group

for

the

five-

and

10-year

periods

and

exceeded

8.25%

for

each

reporting

period.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken

in

an

effort

to

improve

the

performance

of

the

Fund

and

the

global

equity

funds

as

a

whole.

Management

specifically

highlighted

the

strategic

initiatives

being

undertaken

in

the

Templeton

Global

Equity

Group,

including

enhancements

to

the

leadership

of

the

group

and

the

commitment

of

additional

resources

important

to

delivering

sustainable

returns.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

while

management’s

efforts

continue

to

be

closely

monitored.

International

Equity

Series

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

international

large-cap

value

funds.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

discussed

the

performance

of

the

Fund

with

management

and

management

explained

that

the

Performance

Universe

for

the

Fund,

which

has

a

value

discipline,

was

not

directly

comparable

to

the

Fund

as

the

Performance

Universe

includes

funds

more

skewed

toward

the

growth

style,

which

has

negatively

impacted

the

Fund’s

relative

returns

during

longer-term

periods

of

outperformance

of

growth

investing

strategies

over

value

investing

strategies.

Management

further

explained

that,

on

average,

the

Fund

has

had

a

larger

allocation

to

the

energy

sector

and

a

smaller

allocation

to

the

industrials

sector

as

compared

to

peers,

noting

that

the

energy

sector

was

one

of

the

worst

performing

sectors

and

the

industrials

sector

Templeton

Institutional

Funds

Shareholder

Information

46

ftinstitutional.com

Semiannual

Report

was

one

of

the

top

performing

sectors

for

the

3-

and

5-year

periods.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken

in

an

effort

to

improve

the

performance

of

the

Fund

and

the

global

equity

funds

as

a

whole.

Management

specifically

highlighted

the

strategic

initiatives

being

undertaken

in

the

Templeton

Global

Equity

Group,

including

enhancements

to

the

leadership

of

the

group

and

the

commitment

of

additional

resources

important

to

delivering

sustainable

returns.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

while

management’s

efforts

continue

to

be

closely

monitored.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

each

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

each

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

or

semi-annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for:

(i)

Primary

shares

for

the

International

Equity

Series

and

for

Institutional

Class,

Class

I,

Class

Y

and

Class

Z

for

certain

other

funds

in

the

Expense

Group,

and

(ii)

Institutional

Class,

Retirement

Class,

Class

I,

Class

IS,

Class

NAV,

Class

R5

and

Class

Y

shares

for

certain

funds

in

the

Foreign

Smaller

Companies

Series

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

Foreign

Smaller

Companies

Series

-

The

Expense

Group

for

the

Fund

included

the

Fund

and

16

other

international

small-/mid-cap

growth

funds.

The

Board

noted

that

the

Management

Rate

for

the

Fund

was

equal

to

the

median

of

its

Expense

Group

and

the

actual

total

expense

ratio

for

the

Fund

was

below

the

median

and

in

the

first

quintile

(least

expensive)

of

its

Expense

Group.

The

Board

further

noted

that

the

Fund’s

Sub-Adviser

is

paid

by

TICL

out

of

the

management

fee

TICL

receives

from

the

Fund

and

that

the

allocation

of

the

fee

between

TICL

and

the

Sub-Adviser

reflected

the

services

provided

by

each

to

the

Fund.

After

consideration

of

the

above,

the

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

and

the

sub-advisory

fee

paid

to

the

Sub-Adviser

are

reasonable.

International

Equity

Series

-

The

Expense

Group

for

the

Fund

included

the

Fund

and

eight

other

institutional

international

large-cap

value

funds.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

the

Fund

were

slightly

above

the

medians

of

its

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

each

Manager

and

its

affiliates

in

connection

with

the

operation

of

each

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

provided

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2021,

being

the

most

recent

fiscal

year-end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-

related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Funds’

profitability

report

presentations

from

prior

years.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Funds’

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

each

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

each

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

Templeton

Institutional

Funds

Shareholder

Information

47

ftinstitutional.com

Semiannual

Report

which

effort

has

required

considerable

upfront

expenditures

by

each

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Funds,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

each

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

each

Manager

and

its

affiliates

from

providing

services

to

each

Fund

was

not

excessive

in

view

of

the

nature,

extent,

and

quality

of

services

provided

to

each

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

each

Manager

may

realize

economies

of

scale,

if

any,

as

each

Fund

grows

larger

and

whether

each

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

a

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

the

Managers’

views

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Managers

incur

across

the

FT

family

of

funds

as

a

whole.

The

Board

noted

that

the

International

Equity

Series

had

experienced

a

decrease

in

assets

and

would

not

be

expected

to

demonstrate

additional

economies

of

scale

in

the

near

term,

but

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

each

Manager

and

its

affiliates,

each

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

Liquidity

Risk

Management

Program

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

Franklin

Templeton

and

Legg

Mason

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Legal,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

Templeton

Institutional

Funds

Shareholder

Information

48

ftinstitutional.com

Semiannual

Report

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2022,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2021.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Schedule

of

Investments

The

Trust

files

a

complete

schedule

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

each

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

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/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

ZTIF

S

08/22

©

2022

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

Templeton

Institutional

Funds

Investment

Manager

Distributor

Shareholder

Services

Templeton

Investment

Counsel,

LLC

Franklin

Distributors,

LLC

(800)

321-8563

ftinstitutional.com

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. 

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert. 

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2)

The audit committee financial experts are Ann

Torre Bates and David W. Niemiec

and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services. N/A

Item 5. Audit Committee

of Listed Registrants.

 N/A

Item 6. Schedule of Investments.   N/A

Item 7

. Disclosure of Proxy Voting Policies and Procedures for

Closed-End Management Investment Companies.  N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A

Item 9

. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.  N/A

Item 10

. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSRS, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls.

There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12.

Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                       N/A

Item 13. Exhibits.

(a)(1) Code of Ethics

codeofethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.

(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON INSTITUTIONAL FUNDS

By S\MATTHEW T. HINKLE______________________

Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  August 26, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By S\MATTHEW T. HINKLE______________________

Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  August 26, 2022

By S\CHRISTOPHER KINGS______________________

      Christopher Kings

      Chief Financial Officer, Chief Accounting Officer and Treasurer

Date  August 26, 2022