UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04450
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FRANKLIN TEMPLETON GOBAL TRUST
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(Exact name of registrant as specified in charter)
ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Address of principal executive offices) (Zip code)
CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)
Registrant's telephone number, including area Code: (650) 312-2000
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Date of fiscal year end: 10/31
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Date of reporting period: 4/30/07
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ITEM 1. REPORTS TO STOCKHOLDERS.
APRIL 30, 2007
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A series of Franklin Templeton
Global Trust
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SEMIANNUAL REPORT AND SHAREHOLDER LETTER INCOME
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WANT TO RECEIVE
THIS DOCUMENT
FASTER VIA EMAIL?
FRANKLIN TEMPLETON
HARD CURRENCY FUND Eligible shareholders can
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franklintempleton.com.
See inside for details.
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[LOGO](R)
FRANKLIN TEMPLETON
INVESTMENTS
FRANKLIN o TEMPLETON o MUTUAL SERIES
Franklin Templeton Investments
GAIN FROM OUR PERSPECTIVE(R)
Franklin Templeton's distinct multi-manager
structure combines the specialized expertise of
three world-class investment management
groups--Franklin, Templeton and Mutual Series.
SPECIALIZED EXPERTISE Each of our portfolio management groups operates
autonomously, relying on its own research and
staying true to the unique investment disciplines
that underlie its success.
FRANKLIN. Founded in 1947, Franklin is a recognized
leader in fixed income investing and also brings
expertise in growth- and value-style U.S. equity
investing.
TEMPLETON. Founded in 1940, Templeton pioneered
international investing and, in 1954, launched what
has become the industry's oldest global fund. Today,
with offices in over 25 countries, Templeton offers
investors a truly global perspective.
MUTUAL SERIES. Founded in 1949, Mutual Series is
dedicated to a unique style of value investing,
searching aggressively for opportunity among what it
believes are undervalued stocks, as well as
arbitrage situations and distressed securities.
TRUE DIVERSIFICATION Because our management groups work independently and
adhere to different investment approaches, Franklin,
Templeton and Mutual Series funds typically have
distinct portfolios. That's why our funds can be
used to build truly diversified allocation plans
covering every major asset class.
RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we seek to
consistently provide investors with exceptional
risk-adjusted returns over the long term, as well as
the reliable, accurate and personal service that has
helped us become one of the most trusted names in
financial services.
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MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
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Not part of the semiannual report
Contents
SHAREHOLDER LETTER ........................................................ 1
SEMIANNUAL REPORT
Franklin Templeton Hard Currency Fund ..................................... 3
Performance Summary ....................................................... 9
Your Fund's Expenses ...................................................... 11
Financial Highlights and Statement of Investments ......................... 13
Financial Statements ...................................................... 16
Notes to Financial Statements ............................................. 19
Meeting of Shareholders ................................................... 29
Shareholder Information ................................................... 34
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Shareholder Letter
Dear Shareholder:
During the six months ended April 30, 2007, major economies including those of
China, Japan and the euro zone remained resilient as U.S. growth moderated.
Accelerating global growth and rising global short-term interest rates
contributed to weak U.S. currency fundamentals, and many countries' currencies
strengthened against the U.S. dollar.
In the enclosed semiannual report for Franklin Templeton Hard Currency Fund, the
portfolio manager discusses market conditions, investment management decisions
and Fund performance during the period under review. You will also find
performance data and financial information. Please remember that all securities
markets fluctuate, as do mutual fund share prices.
If you would like more frequent updates, FRANKLINTEMPLETON.COM provides daily
prices, monthly performance figures, portfolio holdings and other information.
You can also access your account, buy and sell shares, read timely articles, and
find helpful financial planning tools. We hope you will take advantage of these
online services.
As always, we recommend investors consult their financial advisors and review
their portfolios to design a long-term strategy and portfolio allocation
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eDELIVERY DETAILS
Log in at franklintempleton.com and click on eDelivery. Shareholders who are
registered at franklintempleton.com can receive these reports via email. Not all
accounts are eligible for eDelivery.
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NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
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Not part of the semiannual report | 1
that meet their individual needs, goals and risk tolerance. We firmly believe
that most people benefit from professional advice, and that advice is invaluable
as investors navigate changing market environments.
We thank you for investing with Franklin Templeton, welcome your questions and
comments, and look forward to serving your investment needs in the years ahead.
Sincerely,
/s/ Rupert H. Johnson, Jr.
Rupert H. Johnson, Jr.
President and Chief Executive Officer - Investment Management
Franklin Templeton Global Trust
THIS LETTER REFLECTS OUR ANALYSIS AND OPINIONS AS OF APRIL 30, 2007. 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.
2 | Not part of the semiannual report
Semiannual Report
Franklin Templeton
Hard Currency Fund
YOUR FUND'S GOAL AND MAIN INVESTMENTS: Franklin Templeton Hard Currency Fund
seeks to protect against depreciation of the U.S. dollar relative to other
currencies. The Fund seeks to achieve its goal by investing at least 80% of its
net assets in investments denominated in hard currencies (as defined in the
prospectus). The Fund normally invests mainly in high-quality short-term money
market instruments and forward currency contracts denominated in foreign hard
currencies. The Fund focuses on countries and markets that historically have
experienced low inflation rates and that, in the investment manager's view,
follow economic policies conducive to continual low inflation rates and currency
appreciation versus the U.S. dollar over the long term.
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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. PLEASE VISIT FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236 FOR
MOST RECENT MONTH-END PERFORMANCE.
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This semiannual report for Franklin Templeton Hard Currency Fund covers the
period ended April 30, 2007.
PERFORMANCE OVERVIEW
Franklin Templeton Hard Currency Fund - Class A posted a +4.10% cumulative total
return for the six months under review. The Fund underperformed its benchmark,
the J.P. Morgan (JPM) 3 Month Global Cash Index, which posted a +7.12% total
return for the same period. 1 The Fund typically does not attempt to directly
match the composition of the index; thus the results are not directly
comparable. The Fund outperformed the U.S. dollar, which fell 3.09% relative to
its major trading partners during the period. 2 The dollar rose 2.01% versus the
Japanese yen and fell 6.48% versus the euro. 3 You can find the Fund's long-term
performance data in the Performance Summary beginning on page 9.
1. Source: J.P. Morgan. The JPM 3 Month Global Cash Index tracks total returns
of 3-month constant maturity euro-currency deposits, the only short-term
securities consistent across all markets in terms of liquidity, maturity and
credit quality. The index is unmanaged and includes reinvested distributions.
One cannot invest directly in an index, nor is an index representative of the
Fund's portfolio.
2. Source: Federal Reserve Board (H10 Report). The Federal Reserve Board U.S.
Trade Weighted Major Currency Dollar Index is a weighted average of the foreign
exchange values of the U.S. dollar against a subset of currencies in the broad
index that circulates widely outside the country of issue.
3. Source: Exshare via Compustat.
THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 15.
Semiannual Report | 3
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WHAT IS A CURRENT ACCOUNT?
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A current account is that part of the balance of payments where all of one
country's international transactions in goods, services, income and transfers
are recorded.
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WHAT IS BALANCE OF PAYMENTS?
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Balance of payments is a record of all of a country's exports and imports of
goods and services, borrowing and lending with the rest of the world during a
particular time period. It helps a country evaluate its competitive strengths
and weaknesses and forecast the strength of its currency.
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ECONOMIC AND MARKET OVERVIEW
In spite of moderation in the U.S. domestic growth environment during the six
months under review, global economic growth remained resilient. Notably,
economic activity accelerated in major economies such as those of China, Japan
and the euro zone. Global labor markets were strong, and relatively high
resource utilization maintained medium-term pressure on prices. As a result,
central banks of most major economies held their short-term interest rates
steady or continued to raise them. This backdrop of continued strong global
growth and rising short-term interest rates during a period of weak U.S.
currency fundamentals supported currency performance against the U.S dollar.
Driven largely by declines in residential investment, U.S. economic growth
slowed to below its historical average. U.S. gross domestic product (GDP) grew
1.9% in first quarter 2007 compared with the same quarter of 2006
(year-over-year). On the other hand, spillover from the housing market
correction into other sectors of the economy was relatively small. Despite GDP
moderation, the Federal Reserve Board (Fed) left rates unchanged over the period
at 5.25%, due to persistent inflationary pressures, which in part stemmed from a
tight labor market and fading disinflationary impact from import prices. Core
personal consumption expenditure (PCE) continued to track above 2% over the
period. 4 The trade deficit benefited from lower oil prices relative to the
preceding six months; however, regional imbalances persisted, particularly
against Asian countries. Large trade and capital imbalances were reflected in
the U.S. balance of payments, which recorded a current account deficit of 5.7%
of GDP. 5
China's economic growth continued to lead the Asian region, posting an 11.1%
year-over-year increase in GDP for first quarter 2007, and remained an important
source of growth for other Asian economies. 6 Robust growth in Singapore
continued for the third consecutive year, and the country posted 7.9% GDP growth
in 2006 as strength in non-electronics manufacturing and financial services
sectors offset headwinds from inventory buildup in the U.S. 7 External demand
also remained favorable to Japan, where a large trade surplus and higher income
earned on investments abroad pushed the current account surplus to 3.9% of GDP.
8 In this environment, corporate sector strength drove economic growth while
private consumption spending moderated. However,
4. Source: U.S. Bureau of Economic Analysis. Core PCE comprises the amount
individuals spend on goods and services, excluding food and energy.
5. Source: U.S. Bureau of Economic Analysis.
6. Source: National Bureau of Statistics, China.
7. Source: Monetary Authority of Singapore.
8. Source: Ministry of Finance, Japan.
4 | Semiannual Report
Japan's economic growth was higher in 2006 than in recent years and reached
2.2%. 9 Increased utilization of resources such as production capacity and labor
supported the gradual move to positive inflation and increased durability of its
economic expansion, which is now the longest in postwar history. The Bank of
Japan confirmed its economic structural improvement by increasing the interest
rate 25 basis points (100 basis points equal one percentage point), the second
rate hike since ending the zero interest-rate policy last year.
European economic growth also proved resilient in spite of the U.S. economic
slowdown. GDP growth among the euro-zone economies accelerated to 3.3% in fourth
quarter 2006 year-over-year. 10 Increasing trade with non-euro European
countries as well as Asia provided some cushion to weakening U.S. demand.
Reflecting a relative lack of external imbalance, the euro-zone current account
deficit was only 0.1% of GDP. 10 Fiscal tightening in Germany implemented at the
turn of the year was better absorbed than economists anticipated, as it was
supported by the country's rising consumer and business confidence, increasing
investment and improved labor markets. In the euro zone, the unemployment rate
hit a 7.2% record low in March. 10 While inflation benefited from lower energy
prices relative to year-ago levels, the European Central Bank (ECB) expressed
concern over the impact of strong monetary growth and labor market tightening on
medium-term price stability. The ECB hiked interest rates 50 basis points to
3.75% over the six-month period. Strong employment growth was characteristic of
many European economies. Within the Scandinavian countries of Norway and Sweden,
not only did economic growth register at a faster pace than in the euro zone, at
4.3% and 4.7% in fourth quarter 2006 year-over-year, but also the pressure on
resources was greater as unemployment fell in both countries. 11 With strong
economic growth putting pressure on available resources, the central banks
raised interest rates 75 basis points in Norway and 50 basis points in Sweden
during the period.
INVESTMENT STRATEGY
In making investments in foreign hard currencies, we focus on countries and
markets that historically have experienced low inflation rates and, in our
opinion, follow economic policies favorable to continued low inflation rates and
currency appreciation against the U.S. dollar over the long term.
9. Source: Economic and Social Research Institute, Japan.
10. Source: Eurostat.
11. Sources: Central Bank of Norway; Sveriges Riksbank (Bank of Sweden).
Semiannual Report | 5
ASSET ALLOCATION BY CURRENCY
Based on Total Net Assets as of 4/30/07
Japanese Yen 26.2%
Singapore Dollar 13.6%
Canadian Dollar 13.6%
Swedish Krona 13.2%
Norwegian Krone 6.9%
Polish Zloty 4.2%
Australian Dollar 4.2%
Euro 4.1%
Malaysian Ringgit 3.5%
South Korean Won 2.8%
Indonesian Rupiah 2.8%
Danish Krone 1.8%
Swiss Franc 1.8%
U.S. Dollar 1.3%
MANAGER'S DISCUSSION
During the six months under review, the Fund continued to act as a hedge against
U.S. dollar depreciation as the U.S. dollar fell 3.09% relative to its major
trading partners. 2 We continued to position the Fund's investments in
securities with what we considered were strong macroeconomic fundamentals or
attractive currency valuations. Our portfolio positioning, in particular
continued exposure to a basket of selected Asian currencies, reflected our view
that the U.S. dollar would likely play a role in the unwinding of global
imbalances over the medium term. Although the U.S. dollar began to weaken in
2002, U.S. trade imbalances with Asia have not yet shown a significant
correction. For example, in the five-year period from February 2002 to February
2007, the bilateral U.S. trade deficit against the Pacific Rim countries widened
by 90% to $368 billion on a rolling 12-month basis. 5 In light of the worsening
trade imbalance with Asia, we continued to see some vulnerability on the
financing side of the U.S. balance of payments, due to the potential sensitivity
of capital inflows to the U.S.' economic growth relative to other markets, in
particular Asia. More significantly, we focused on longer-term trends such as
reserve diversification by major Asian central banks and petroleum producers
away from the U.S. dollar.
EUROPE
The largest contributor to performance relative to the benchmark in the
reporting period was the Fund's exposure to European currencies. European
currencies broadly appreciated against the U.S. dollar, benefiting from the
cyclical strength in European economic activity relative to moderating U.S.
growth. During the past six months, the euro reached a record high against the
U.S. dollar and ended the period at the exchange rate of 1.36 U.S. dollars per
euro, and appreciated 6.93% versus the U.S. dollar. 3 Overall, we limited the
Fund's direct exposure to the euro, seeking instead to capture the benefit of a
rising euro through non-euro European currencies that have high sensitivity to
the euro's strength. For example, the Norwegian krone rose 9.98% against the
U.S. dollar, the Polish zloty 9.39% and the Swedish krona 7.65%, which benefited
the Fund's relative performance. 3 Similar to the Scandinavian economies, the
Polish economy also exhibited tightening labor market conditions given strong
economic growth of over 6% and job gains amid significant emigration from Poland
since the country joined the European Union in 2004. 12 Prospects for wage
pressures prompted the National Bank of Poland to raise interest rates, which
supported currency performance.
12. Source: National Bank of Poland.
6 | Semiannual Report
ASIA
During the reporting period, the Fund's exposure to Asia aided relative
performance despite weakness in the Japanese yen, which was the Fund's largest
currency position. The yen underperformed the benchmark index and depreciated
1.97% against the U.S. dollar. 3 We found the Japanese yen's relative value
among the G-7 currencies most striking. 13 The yen has lagged other major
currencies in the current cycle of U.S. dollar weakening, and reached the
weakest level against the euro since the euro's introduction. At the same time,
we believe the Japanese economy has reached a structural inflection point. The
structural improvement in the Japanese economy is most evident in the upward
trend in inflation, which turned positive on a yearly basis in 2006 for the
first time since 1998.
Among other Asian currencies, the Thai baht rose 11.69%, the Australian dollar
7.56%, the Malaysian ringgit 6.74% and the Singapore dollar 2.46% against the
U.S. dollar for the period. 3 While the Indonesian rupiah and the South Korean
won lagged the benchmark index with gains of 0.32% and 1.26%, they outperformed
the U.S. dollar. 3 Additionally, the Fund benefited from the significantly
higher yield earned on Indonesian Treasury bills relative to developed markets
given the country's central bank policy rate ended the reporting period at 9%.
AMERICAS
The Fund's largest currency exposure in the Americas region was to the Canadian
dollar, which rose 1.38% against the U.S. dollar and lagged the benchmark index.
3 Although the Canadian dollar exhibited some sensitivity to commodity prices
and softer U.S. economic data, currency fundamentals remained intact and
Canada's domestic economy's strength continued to be supportive of the currency,
in our opinion, over the medium term. For instance, the Canadian unemployment
rate reached a 30-year low of 6.1%. 14 Additionally, Canada remained the only
G-7 country to run both current account and budget surpluses.
13. The G-7, or Group of Seven, is an informal but exclusive body that seeks to
boost cooperation over trade and finance, strengthen the global economy, promote
peace and democracy, and prevent and resolve conflicts. The G-7 includes Canada,
France, Germany, Italy, Japan, the U.K and the U.S. It is now known as the G-8,
or Group of Eight, after the addition of Russia in 1997.
14. Source: Statistics Canada.
Semiannual Report | 7
Thank you for your continued participation in Franklin Templeton Hard Currency
Fund. We look forward to serving your future investment needs.
[PHOTO OMITTED] /s/ Michael Hasenstab
Michael Hasenstab, Ph.D.
Portfolio Manager
Franklin Templeton Hard Currency Fund
THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF APRIL 30, 2007, 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.
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Please note that although the Fund's Statement of Investments on page 15 of this
report indicates the Fund held 67.90% of its total investments in U.S.
dollar-denominated assets as of 4/30/07, its net exposure to the U.S. dollar as
of that date was only 1.30%. The difference is explained by the Fund's holdings
of forward currency exchange contracts (please see Note 7 in the Notes to
Financial Statements on page 25 of this report) calling for the purchase of
various foreign currencies in exchange for U.S. dollars at various future dates.
The combination of U.S. dollar-denominated instruments with "long" forward
currency exchange contracts creates a position economically equivalent to a
money market instrument denominated in the foreign currency itself. Such
combined positions are an appropriate strategy when the money market for a
particular foreign currency is small or relatively illiquid.
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8 | Semiannual Report
Performance Summary as of 4/30/07
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. 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.
PRICE AND DISTRIBUTION INFORMATION
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CLASS A (SYMBOL: ICPHX) CHANGE 4/30/07 10/31/06
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Net Asset Value (NAV) +$0.18 $9.57 $9.39
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DISTRIBUTIONS (11/1/06-4/30/07)
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Dividend Income $0.1995
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ADVISOR CLASS (SYMBOL: ICHHX) CHANGE 4/30/07 10/31/06
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Net Asset Value (NAV) +$0.18 $9.59 $9.41
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DISTRIBUTIONS (11/1/06-4/30/07)
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Dividend Income $0.2135
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PERFORMANCE
CUMULATIVE TOTAL RETURN EXCLUDES SALES CHARGES. AVERAGE ANNUAL TOTAL RETURNS AND
VALUE OF $10,000 INVESTMENT INCLUDE MAXIMUM SALES CHARGES. CLASS A: 2.25%
MAXIMUM INITIAL SALES CHARGE; ADVISOR CLASS: NO SALES CHARGES. THE FUND MAY
CHARGE A 2% FEE ON REDEMPTIONS MADE WITHIN SEVEN DAYS OF PURCHASE.
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CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
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Cumulative Total Return 1 +4.10% +4.63% +59.36% +44.76%
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Average Annual Total Return 2 +1.72% +2.25% +9.28% +3.54%
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Value of $10,000 Investment 3 $10,172 $10,225 $15,585 $14,157
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Avg. Ann. Total Return (3/31/07) 4 +4.98% +9.61% +3.13%
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Distribution Rate 5 2.96%
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30-Day Standardized Yield 6 3.16%
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Total Annual Operating Expenses 7 1.13%
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ADVISOR CLASS 6-MONTH 1-YEAR 5-YEAR 10-YEAR
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Cumulative Total Return 1 +4.25% +4.94% +62.21% +49.49%
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Average Annual Total Return 2 +4.25% +4.94% +10.16% +4.10%
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Value of $10,000 Investment 3 $10,425 $10,494 $16,221 $14,949
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Avg. Ann. Total Return (3/31/07) 4 +7.85% +10.53% +3.68%
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Distribution Rate 5 3.30%
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30-Day Standardized Yield 6 3.55%
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Total Annual Operating Expenses 7 0.83%
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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, SEE "FUNDS AND
PERFORMANCE" AT FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236.
Semiannual Report | 9
Performance Summary (CONTINUED)
ENDNOTES
SPECIAL RISKS ARE ASSOCIATED WITH FOREIGN INVESTING, INCLUDING ECONOMIC
INSTABILITY AND POLITICAL DEVELOPMENTS. THE FUND'S ASSETS ARE LARGELY INVESTED
IN FOREIGN CURRENCIES, AND THEREFORE INVOLVE POTENTIAL FOR SIGNIFICANT GAIN OR
LOSS FROM CURRENCY EXCHANGE RATE FLUCTUATIONS. THE FUND DOES NOT SEEK TO
MAINTAIN A STABLE NET ASSET VALUE AND SHOULD NOT BE CONSIDERED A SUBSTITUTE FOR
A U.S. DOLLAR MONEY MARKET FUND. THE FUND'S PROSPECTUS ALSO INCLUDES A
DESCRIPTION OF THE MAIN INVESTMENT RISKS.
CLASS A: Prior to 8/3/98, these shares were offered at a higher initial
sales charge; thus actual total returns would have been lower.
ADVISOR CLASS: Shares are available to certain eligible investors as described
in the prospectus.
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. Six-month return has not been
annualized.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated.
4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.
5. Distribution rate is based on the sum of the respective class's last four
quarterly dividends and the maximum offering price (NAV for Advisor Class) per
share on 4/30/07.
6. Yield, calculated as required by the SEC, is based on the earnings of the
Fund's portfolio for the 30 days ended 4/30/07.
7. Figures are as stated in the Fund's prospectus current as of the date of this
report.
10 | Semiannual Report
Your Fund's Expenses
As a Fund shareholder, you can incur two types of costs:
o Transaction costs, including sales charges (loads) on Fund purchases and
redemption fees; and
o Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing
costs, sometimes referred to as operating expenses.
The following table 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 first line (Actual) for each share class listed in the table provides actual
account values and expenses. The "Ending Account Value" is derived from the
Fund's actual return, which includes the effect of Fund expenses.
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:
1. Divide your account value by $1,000.
IF AN ACCOUNT HAD AN $8,600 VALUE, THEN $8,600 / $1,000 = 8.6.
2. Multiply the result by the number under the heading "Expenses Paid During
Period."
IF EXPENSES PAID DURING PERIOD WERE $7.50, THEN 8.6 X $7.50 = $64.50.
In this illustration, the estimated expenses paid this period are $64.50.
HYPOTHETICAL EXAMPLE FOR COMPARISON WITH OTHER FUNDS
Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical "Ending
Account Value" is based on the actual expense ratio for each class and an
assumed 5% annual rate of return before expenses, which does not represent the
Fund's actual return. The figure under the heading "Expenses Paid During Period"
shows the hypothetical expenses your account would have incurred under this
scenario. You can compare this figure with the 5% hypothetical examples that
appear in shareholder reports of other funds.
Semiannual Report | 11
Your Fund's Expenses (CONTINUED)
PLEASE NOTE THAT EXPENSES SHOWN IN THE TABLE ARE MEANT TO HIGHLIGHT ONGOING
COSTS AND DO NOT REFLECT ANY TRANSACTION COSTS, SUCH AS SALES CHARGES OR
REDEMPTION FEES. Therefore, the second line for each class is useful in
comparing ongoing costs only, and will not help you compare total costs of
owning different funds. In addition, if transaction costs were included, your
total costs would have been higher. Please refer to the Fund prospectus for
additional information on operating expenses.
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BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
CLASS A VALUE 11/1/06 VALUE 4/30/07 PERIOD* 11/1/06-4/30/07
- --------------------------------------------------------------------------------------------------------
Actual $1,000 $1,041.00 $5.67
- --------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000 $1,019.24 $5.61
- --------------------------------------------------------------------------------------------------------
ADVISOR CLASS
- --------------------------------------------------------------------------------------------------------
Actual $1,000 $1,042.50 $4.30
- --------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000 $1,020.58 $4.26
- --------------------------------------------------------------------------------------------------------
*Expenses are equal to the annualized expense ratio for each class (A: 1.12% and
Advisor: 0.85%), multiplied by the average account value over the period,
multiplied by 181/365 to reflect the one-half year period.
12 | Semiannual Report
Franklin Templeton Global Trust
FINANCIAL HIGHLIGHTS
FRANKLIN TEMPLETON HARD CURRENCY FUND
-------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2007 YEAR ENDED OCTOBER 31,
CLASS A (UNAUDITED) 2006 2005 2004 2003 2002
-------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ............. $ 9.39 $ 9.34 $ 9.85 $ 9.59 $ 8.56 $ 8.08
-------------------------------------------------------------------------------
Income from investment operations a:
Net investment income b ....................... 0.14 0.24 0.15 0.09 0.11 0.09
Net realized and unrealized gains (losses) .... 0.24 0.47 (0.12) 0.78 1.46 0.63
-------------------------------------------------------------------------------
Total from investment operations ................. 0.38 0.71 0.03 0.87 1.57 0.72
-------------------------------------------------------------------------------
Less distributions from:
Net investment income and net realized
foreign currency gains ..................... (0.20) (0.66) (0.46) (0.61) (0.54) (0.24)
Net realized gains ............................ -- -- (0.08) -- -- --
-------------------------------------------------------------------------------
Total distributions .............................. (0.20) (0.66) (0.54) (0.61) (0.54) (0.24)
-------------------------------------------------------------------------------
Redemption fees .................................. -- d -- d -- d -- d -- --
-------------------------------------------------------------------------------
Net asset value, end of period ................... $ 9.57 $ 9.39 $ 9.34 $ 9.85 $ 9.59 $ 8.56
===============================================================================
Total return c ................................... 4.10% 8.06% 0.17% 9.44% 19.05% 9.11%
RATIOS TO AVERAGE NET ASSETS
Expenses ...................................... 1.12% e,f 1.13% e 1.19% e 1.24% e 1.32% 1.50%
Net investment income ......................... 2.97% f 2.58% 1.54% 0.95% 1.19% 1.10%
SUPPLEMENTAL DATA
Net assets, end of period (000's) ................ $ 294,842 $322,449 $190,163 $211,098 $ 143,715 $ 50,622
Portfolio turnover rate .......................... 0.00% g 0.00% g 0.00% g 0.00% g 0.00% g 76.27%
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 repurchase of the Fund shares in relation to income earned and/or
fluctuating market value of the investments of the Fund.
b Based on average daily shares outstanding.
c Total return does not reflect sales commissions or contingent deferred sales
charges, if applicable, and is not annualized for periods less than one year.
d Amount rounds to less than $0.01 per share.
e Benefit of expense reduction rounds to less than 0.01%.
f Annualized.
g See Note 6 regarding investment transactions.
Semiannual Report |
The accompanying notes are an integral part of these financial statements. | 13
Franklin Templeton Global Trust
FINANCIAL HIGHLIGHTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
---------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2007 YEAR ENDED OCTOBER 31,
ADVISOR CLASS (UNAUDITED) 2006 2005 2004 2003 2002
---------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ............... $ 9.41 $ 9.36 $ 9.87 $ 9.61 $ 8.58 $ 8.09
---------------------------------------------------------------------------
Income from investment operations a:
Net investment income b ......................... 0.15 0.27 0.18 0.13 0.14 0.12
Net realized and unrealized gains (losses) ...... 0.24 0.47 (0.12) 0.79 1.46 0.64
---------------------------------------------------------------------------
Total from investment operations ................... 0.39 0.74 0.06 0.92 1.60 0.76
---------------------------------------------------------------------------
Less distributions from:
Net investment income and net realized
foreign currency gains ....................... (0.21) (0.69) (0.49) (0.66) (0.57) (0.27)
Net realized gains .............................. -- -- (0.08) -- -- --
---------------------------------------------------------------------------
Total distributions ................................ (0.21) (0.69) (0.57) (0.66) (0.57) (0.27)
---------------------------------------------------------------------------
Redemption fees .................................... -- d -- d -- d -- d -- --
---------------------------------------------------------------------------
Net asset value, end of period ..................... $ 9.59 $ 9.41 $ 9.36 $ 9.87 $ 9.61 $ 8.58
===========================================================================
Total return c ..................................... 4.25% 8.35% 0.50% 9.89% 19.45% 9.65%
RATIOS TO AVERAGE NET ASSETS
Expenses ........................................ 0.85% e,f 0.83% e 0.83% e 0.84% e 0.92% 1.09%
Net investment income ........................... 3.24% f 2.88% 1.89% 1.35% 1.59% 1.51%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .................. $43,978 $40,912 $17,532 $22,442 $10,163 $ 1,724
Portfolio turnover rate ............................ 0.00% g 0.00% g 0.00% g 0.00% g 0.00% g 76.27%
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 repurchase of the Fund shares in relation to income earned and/or
fluctuating market value of the investments of the Fund.
b Based on average daily shares outstanding.
c Total return is not annualized for periods less than one year.
d Amount rounds to less than $0.01 per share.
e Benefit of expense reduction rounds to less than 0.01%.
f Annualized.
g See Note 6 regarding investment transactions.
14 | The accompanying notes are an integral part of these financial statements.
| Semiannual Report
Franklin Templeton Global Trust
STATEMENT OF INVESTMENTS, APRIL 30, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON HARD CURRENCY FUND PRINCIPAL AMOUNT b VALUE
- --------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES 37.4%
a Canada Treasury Bills, 5/31/07 - 7/26/07 ............................. 25,410,000 CAD $ 22,790,235
a Denmark Treasury Bill, 5/01/07 ....................................... 33,650,000 DKK 6,162,891
a France Treasury Bill, 8/02/07 ........................................ 5,165,000 EUR 6,979,228
a Germany Treasury Bill, 9/12/07 ....................................... 5,000,000 EUR 6,726,625
Government of Singapore, 2.625%, 10/01/07 ............................ 31,200,000 SGD 20,569,861
a Norway Treasury Bills, 6/20/07 - 9/19/07 ............................. 120,390,000 NOK 20,024,090
Queensland Treasury Corp., 07G, 8.00%, 9/14/07 ....................... 13,300,000 AUD 11,112,525
a Sweden Treasury Bills, 6/20/07 - 9/19/07 ............................. 220,650,000 SEK 32,580,244
-------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES (COST $121,440,536) ... 126,945,699
-------------
U.S. GOVERNMENT AND AGENCY SECURITIES 73.9%
a FHLB, 5/01/07 ........................................................ 55,511,000 55,511,000
FNMA, 2.125%, 10/09/07 ............................................... 2,400,000,000 JPY 20,227,836
a U.S. Treasury Bills, 5/03/07 - 6/07/07 ............................... 175,000,000 174,568,505
-------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES (COST $250,250,420) ...... 250,307,341
-------------
TOTAL INVESTMENTS (COST $371,690,956) 111.3% ......................... 377,253,040
NET UNREALIZED GAIN ON FORWARD EXCHANGE CONTRACTS 0.4% ............... 1,266,849
OTHER ASSETS, LESS LIABILITIES (11.7)% ............................... (39,699,328)
-------------
NET ASSETS 100.0% .................................................... $ 338,820,561
=============
CURRENCY ABBREVIATIONS
AUD - Australian Dollar
CAD - Canadian Dollar
DKK - Danish Krone
EUR - Euro
JPY - Japanese Yen
NOK - Norwegian Krone
SEK - Swedish Krona
SGD - Singapore Dollar
SELECTED PORTFOLIO ABBREVIATIONS
FHLB - Federal Home Loan Bank
FNMA - Federal National Mortgage Association
a The security is traded on a discount basis with no stated coupon rate.
b The principal amount is stated in U.S. dollars unless otherwise indicated.
Semiannual Report |
The accompanying notes are an integral part of these financial statements. | 15
Franklin Templeton Global Trust
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2007 (unaudited)
------------------
FRANKLIN TEMPLETON
HARD CURRENCY FUND
------------------
Assets:
Investments in securities:
Cost ................................................................... $ 371,690,956
==================
Value .................................................................. $ 377,253,040
Foreign currency, at value (cost $71,425) ................................ 98,596
Receivables:
Capital shares sold .................................................... 1,282,935
Interest ............................................................... 180,236
Unrealized gain on forward exchange contracts (Note 7) ................... 3,085,414
------------------
Total assets ......................................................... 381,900,221
------------------
Liabilities:
Payables:
Investment securities purchased ........................................ 39,808,252
Capital shares redeemed ................................................ 949,467
Affiliates ............................................................. 380,045
Funds advanced by custodian .............................................. 56,829
Unrealized loss on forward exchange contracts (Note 7) ................... 1,818,565
Accrued expenses and other liabilities ................................... 66,502
------------------
Total liabilities .................................................... 43,079,660
------------------
Net assets, at value ............................................... $ 338,820,561
==================
Net assets consist of:
Paid-in capital .......................................................... $ 327,786,461
Undistributed net investment income ...................................... 2,889,115
Net unrealized appreciation (depreciation) ............................... 6,853,413
Accumulated net realized gain (loss) ..................................... 1,291,572
------------------
Net assets, at value ............................................... $ 338,820,561
==================
CLASS A:
Net assets, at value ..................................................... $ 294,842,399
==================
Shares outstanding ....................................................... 30,808,245
==================
Net asset value per share a .............................................. $ 9.57
==================
Maximum offering price per share (net asset per share / 97.75%) .......... $ 9.79
==================
ADVISOR CLASS:
Net assets, at value ..................................................... $ 43,978,162
==================
Shares outstanding ....................................................... 4,586,338
==================
Net asset value and maximum offering price per share a ................... $ 9.59
==================
a Redemption price is equal to net asset value less contingent deferred sales
charges, if applicable, and redemption fees retained by the Fund.
16 | The accompanying notes are an integral part of these financial statements.
| Semiannual Report
Franklin Templeton Global Trust
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
for the six months ended April 30, 2007 (unaudited)
------------------
FRANKLIN TEMPLETON
HARD CURRENCY FUND
------------------
Investment income:
Interest ................................................................. $ 7,240,654
------------------
Expenses:
Management fees (Note 3a) ................................................ 1,145,090
Distribution fees (Note 3c)
Class A ................................................................ 416,504
Transfer agent fees (Note 3e) ............................................ 255,484
Custodian fees (Note 4) .................................................. 17,296
Reports to shareholders .................................................. 30,379
Registration and filing fees ............................................. 47,014
Professional fees ........................................................ 26,142
Trustees' fees and expenses .............................................. 4,455
Other .................................................................... 7,754
------------------
Total expenses ....................................................... 1,950,118
Expense reductions (Note 4) .......................................... (2,572)
------------------
Net expenses ......................................................... 1,947,546
------------------
Net investment income .............................................. 5,293,108
------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ............................................................ 4,322,910
Foreign currency transactions .......................................... (697,382)
------------------
Net realized gain (loss) ........................................... 3,625,528
------------------
Net change in unrealized appreciation (depreciation) on:
Investments ............................................................ 4,192,128
Translation of assets and liabilities denominated in foreign
currencies ........................................................... 24,208
------------------
Net change in unrealized appreciation (depreciation) ............... 4,216,336
------------------
Net realized and unrealized gain (loss) ..................................... 7,841,864
------------------
Net increase (decrease) in net assets resulting from operations ............. $ 13,134,972
==================
Semiannual Report |
The accompanying notes are an integral part of these financial statements. | 17
Franklin Templeton Global Trust
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------
FRANKLIN TEMPLETON
HARD CURRENCY FUND
------------------------------------
SIX MONTHS ENDED
APRIL 30, 2007 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2006
------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income ............................................................... $ 5,293,108 $ 6,971,320
Net realized gain (loss) from investments and foreign currency transactions ......... 3,625,528 3,362,176
Net change in unrealized appreciation (depreciation) on investments and translation
of assets and liabilities denominated in foreign currencies ....................... 4,216,336 6,359,721
------------------------------------
Net increase (decrease) in net assets resulting from operations ................. 13,134,972 16,693,217
------------------------------------
Distributions to shareholders from:
Net investment income and net realized foreign currency gains:
Class A .......................................................................... (6,767,844) (14,112,136)
Advisor Class .................................................................... (974,221) (1,424,716)
------------------------------------
Total distributions to shareholders ................................................... (7,742,065) (15,536,852)
------------------------------------
Capital share transactions: (Note 2)
Class A .......................................................................... (32,248,457) 131,071,904
Advisor Class .................................................................... 2,314,899 23,434,378
------------------------------------
Total capital share transactions ...................................................... (29,933,558) 154,506,282
------------------------------------
Redemption fees ....................................................................... 409 3,868
------------------------------------
Net increase (decrease) in net assets ........................................... (24,540,242) 155,666,515
Net assets:
Beginning of period ................................................................... 363,360,803 207,694,288
------------------------------------
End of period ......................................................................... $ 338,820,561 $ 363,360,803
====================================
Undistributed net investment income included in net assets:
End of period ......................................................................... $ 2,889,115 $ 5,338,072
====================================
18 | The accompanying notes are an integral part of these financial statements.
| Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin Templeton Global Trust (the Trust) is registered under the Investment
Company Act of 1940, as amended, (the 1940 Act) as a non-diversified, open-end
investment company, consisting of one fund, the Franklin Templeton Hard Currency
Fund (the Fund). The Fund offers two classes of shares: Class A and Advisor
Class. Each class of shares differs by its initial sales load, contingent
deferred sales charges, distribution fees, voting rights on matters affecting a
single class and its exchange privilege.
The following summarizes the Fund's significant accounting policies.
A. SECURITY VALUATION
Securities listed on a securities 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. Over-the-counter securities and listed securities for
which there is no reported sale 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.
Government securities generally trade in the over-the-counter market rather than
on a securities exchange. The Fund may utilize independent pricing services,
quotations from bond dealers, and information with respect to bond and note
transactions, to assist in determining a current market value for each security.
The Fund's pricing services may use valuation models or matrix pricing which
considers information with respect to comparable bond and note transactions,
quotations from bond dealers, or by reference to other securities that are
considered comparable in such characteristics as rating, interest rate and
maturity date, option adjusted spread models, prepayment projections, interest
rate spreads and yield curves, to determine current value.
Foreign securities are valued as of the close of trading on the foreign stock
exchange on which the security is primarily traded, or the NYSE, whichever is
earlier. If no sale is reported at that time, the foreign security will be
valued within the range of the most recent quoted bid and ask prices. The value
is then converted into its U.S. dollar equivalent at the foreign exchange rate
in effect at the close of the NYSE on the day that the value of the foreign
security is determined.
The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Due to the inherent uncertainty of
valuations of such securities, the fair values may differ significantly from the
values that would have been used had a ready market for such investments
existed. Occasionally, events occur between the time at which trading in a
security is completed and the close of the NYSE that might call into question
the
Semiannual Report | 19
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. SECURITY VALUATION (CONTINUED)
availability (including the reliability) of the value of a portfolio security
held by the Fund. The investment manager monitors price movements following the
close of trading in foreign stock markets through a series of country specific
market proxies (such as baskets of American Depository Receipts, futures
contracts and exchange traded funds). These price movements are measured against
established trigger thresholds for each specific market proxy to assist in
determining if an event has occurred. If such an event occurs, the securities
may be valued using fair value procedures, which may include the use of
independent pricing services. All security valuation procedures are approved by
the Trust's Board of Trustees.
B. FOREIGN CURRENCY TRANSLATION
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. 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 Trust's Board of Trustees.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments on the
Statement 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. FOREIGN CURRENCY CONTRACTS
When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate at a future date. Realized and unrealized gains and losses on these
contracts are included in the Statement of Operations.
20 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. FOREIGN CURRENCY CONTRACTS (CONTINUED)
The Fund may also enter into forward exchange contracts to hedge against
fluctuations in foreign exchange rates or to gain exposure to certain foreign
currencies. These contracts are valued daily by the Fund and the unrealized
gains or losses on the contracts, as measured by the difference between the
contractual forward foreign exchange rates and the forward rates at the
reporting date, are included in the Statement of Assets and Liabilities.
Realized and unrealized gains and losses on these contracts are included in the
Statement of Operations.
The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities.
D. INCOME TAXES
No provision has been made for U.S. income taxes because it is the Fund's policy
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute to shareholders substantially all of its taxable income and net
realized gains.
E. 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. Distributions to shareholders are recorded on the ex-dividend date and
are determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States.
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.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class. Differences in per share
distributions, by class, are generally due to differences in class specific
expenses.
Semiannual Report | 21
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
F. ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America 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.
G. REDEMPTION FEES
A short term trading redemption fee will be imposed, with some exceptions, on
any fund shares that are redeemed or exchanged within seven calendar days
following their purchase date. The redemption fee is 2% of the amount redeemed.
Such fees are retained by the Fund and accounted for as an addition to paid-in
capital.
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 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.
2. SHARES OF BENEFICIAL INTEREST
At April 30, 2007, there were an unlimited number of shares authorized ($0.01
par value). Effective May 21, 2007, shareholders approved an Amended and
Restated Declaration of Trust, which changed the authorized shares from $0.01
par value to no par value. Transactions in the Fund's shares were as follows:
--------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2007 OCTOBER 31, 2006
--------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------
CLASS A SHARES:
Shares sold .................... 6,772,627 $ 63,758,552 24,901,994 $ 231,953,286
Shares issued in reinvestment
of distributions ............. 476,253 4,459,063 1,145,884 10,318,899
Shares redeemed ................ (10,783,981) (100,466,072) (12,063,430) (111,200,281)
--------------------------------------------------------------
Net increase (decrease) ........ (3,535,101) $ (32,248,457) 13,984,448 $ 131,071,904
==============================================================
22 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
--------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2007 OCTOBER 31, 2006
--------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------
ADVISOR CLASS SHARES:
Shares sold .................... 1,049,000 $ 9,888,736 3,161,411 $ 29,746,375
Shares issued in reinvestment
of distributions ............. 56,126 526,394 90,400 816,279
Shares redeemed ................ (867,111) (8,100,231) (777,014) (7,128,276)
--------------------------------------------------------
Net increase (decrease) ........ 238,015 $ 2,314,899 2,474,797 $ 23,434,378
========================================================
3. TRANSACTIONS WITH AFFILIATES
Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Trust are also officers and/or directors of the following
subsidiaries:
- --------------------------------------------------------------------------------
SUBSIDIARY AFFILIATION
- --------------------------------------------------------------------------------
Franklin Advisers, Inc. (Advisers) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
Franklin Templeton Distributors, Inc. (Distributors) Principal underwriter
Franklin Templeton Investor Services, LLC (Investor
Services) Transfer agent
A. MANAGEMENT FEES
The Fund pays an investment management fee to Advisers of 0.65% per year of the
average daily net assets of the Fund.
B. ADMINISTRATIVE FEES
Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.
C. DISTRIBUTION FEES
The Trust's Board of Trustees has adopted distribution plans for Class A,
pursuant to Rule 12b-1 under the 1940 Act. Under the Fund's Class A
reimbursement distribution plan, the Fund reimburses Distributors up to 0.45%
per year of Class A's average daily net asset for costs incurred in connection
with the sale and distribution of Fund's shares. Distributors has set the
current rate at 0.30% per year. Under the Class A reimbursement distribution
plan, costs exceeding the maximum for the current plan year cannot be reimbursed
in subsequent periods.
Semiannual Report | 23
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
3. TRANSACTIONS WITH AFFILIATES (CONTINUED)
D. SALES CHARGES/UNDERWRITING AGREEMENTS
Distributors has advised the Fund of the following commission transactions
related to the sales and redemptions of the Fund's shares for the period:
Sales charge retained net of commisions paid to
unaffiliated broker/dealers ................................... $ 31,067
Contingent deferred sales charges retained ....................... $ 2,872
E. TRANSFER AGENT FEES
For the period ended April 30, 2007, the Fund paid transfer agent fees of
$255,484, of which $106,905 was retained by Investor Services.
4. EXPENSE OFFSET ARRANGEMENT
The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended April 30, 2007, the
custodian fees were reduced as noted in the Statement of Operations.
5. INCOME TAXES
For tax purposes, capital losses may be carried over to offset future capital
gains, if any. At October 31, 2006, the capital loss carryforwards were as
follows:
Capital loss carryforwards expiring in:
2013 ...................................................... $ 2,143,875
2014 ...................................................... 190,081
------------
$ 2,333,956
============
At April 30, 2007, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments .......................................... $ 371,914,543
==============
Unrealized appreciation ...................................... 5,527,045
Unrealized depreciation ...................................... (188,548)
--------------
Net unrealized appreciation (depreciation) ................... $ 5,338,497
==============
Net investment income and net realized gains (losses) differ for financial
statement and tax purposes primarily due to differing treatments of foreign
currency transactions, and bond discounts and premiums.
24 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
6. INVESTMENT TRANSACTIONS
There were no purchases or sales of investments (other than short term
securities) for the period ended April 30, 2007.
7. FORWARD EXCHANGE CONTRACTS
At April 30, 2007, the Fund had the following forward exchange contracts
outstanding:
- ----------------------------------------------------------------------------------------------------------
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT DATE GAIN LOSS
- ----------------------------------------------------------------------------------------------------------
CONTRACTS TO BUY
95,200,000 Japanese Yen .............. 850,000 5/01/07 $ -- $ (52,834)
380,966,250 Japanese Yen .............. 3,450,000 5/07/07 -- (257,222)
24,287,655 Swedish Krona ............. 3,450,000 5/07/07 176,374
193,917,500 Japanese Yen .............. 1,750,000 5/09/07 -- (124,366)
199,656,000 Japanese Yen .............. 1,800,000 5/10/07 -- (126,022)
97,475,000 Japanese Yen .............. 875,000 5/14/07 -- (57,274)
196,455,000 Japanese Yen .............. 1,750,000 5/16/07 -- (101,453)
3,500,000 Canadian Dollar ........... 3,142,113 5/17/07 12,983 --
5,000,000 Singapore Dollar .......... 3,214,401 5/17/07 81,231 --
11,000,000,000 Indonesian Rupiah ......... 1,175,214 5/18/07 32,662 --
20,000,000 Swedish Krona ............. 2,824,859 5/18/07 163,217 --
2,724,300 Polish Zloty .............. 900,000 5/22/07 82,506 --
6,357,960 Swedish Krona ............. 900,000 5/22/07 50,122 --
168,570,000 Japanese Yen .............. 1,500,000 5/24/07 -- (83,837)
56,140,000 Japanese Yen .............. 500,000 5/29/07 -- (28,029)
3,539,870 Swedish Krona ............. 500,000 5/29/07 29,205 --
2,500,000,000 Indonesian Rupiah ......... 265,901 6/01/07 8,195 --
3,300,000 Canadian Dollar ........... 2,978,071 6/26/07 374 --
1,620,000 Canadian Dollar ........... 1,463,415 6/27/07 -- (1,225)
290,000,000 Japanese Yen .............. 2,586,514 6/27/07 -- (139,893)
3,250,000 Norwegian Krone ........... 504,862 6/27/07 42,116 --
2,700,000 Singapore Dollar .......... 1,727,668 6/27/07 57,212 --
1,901,280 Canadian Dollar ........... 1,721,550 6/28/07 -- (5,429)
6,250,000 Singapore Dollar .......... 3,984,699 7/11/07 151,306 --
255,000,000 Japanese Yen .............. 2,205,716 7/17/07 -- (48,750)
7,000,000 Polish Zloty .............. 2,278,794 7/19/07 249,818 --
5,300,000 Canadian Dollar ........... 4,741,456 7/26/07 46,120 --
850,000 Singapore Dollar .......... 550,197 7/30/07 13,112 --
840,000 Polish Zloty .............. 286,006 8/17/07 17,640 --
1,000,000,000 Korean Won ................ 1,068,376 8/20/07 8,589 --
132,000,000 Thailand Baht ............. 3,612,479 8/20/07 196,666 --
34,216,000 Thailand Baht ............. 955,754 9/04/07 32,265 --
2,930,598 Australian Dollar ......... 2,333,635 9/05/07 91,161 --
2,791,880 Polish Zloty .............. 983,610 9/05/07 26,036 --
Semiannual Report | 25
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
7. FORWARD EXCHANGE CONTRACTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT DATE GAIN LOSS
- ----------------------------------------------------------------------------------------------------------
4,568,615 Swiss Franc ............... 3,919,539 9/05/07 $ -- $ (96,562)
700,000,000 Japanese Yen .............. 6,222,775 9/14/07 -- (257,290)
9,300,000 Norwegian Krone ........... 1,531,747 9/14/07 35,518 --
4,800,000 Polish Zloty .............. 1,685,571 9/14/07 50,633 --
5,000,000 Singapore Dollar .......... 3,308,848 9/14/07 15,886 --
2,750,000 Swiss Franc ............... 2,311,235 9/27/07 -- (6,157)
2,575,000,000 Korean Won ................ 2,792,595 9/27/07 -- (17,013)
6,900,000 Polish Zloty .............. 2,398,165 9/27/07 98,353 --
3,500,000 Singapore Dollar .......... 2,306,851 9/27/07 22,678 --
225,000,000 Japanese Yen .............. 1,966,611 10/09/07 -- (43,093)
1,150,650,000 Japanese Yen .............. 10,000,000 10/12/07 -- (159,406)
34,550,000 Malaysian Ringgit ......... 10,000,000 10/12/07 177,730 --
1,800,000 Polish Zloty .............. 606,776 10/16/07 44,766 --
6,000,000,000 Indonesian Rupiah ......... 649,702 10/29/07 755 --
4,650,000,000 Korean Won ................ 4,988,200 10/29/07 27,628 --
512,800,000 Japanese Yen .............. 4,403,985 11/02/07 -- (6,936)
700,000,000 Japanese Yen .............. 6,011,680 11/09/07 -- (4,413)
845,000 Australian Dollar ......... 655,720 11/13/07 41,819 --
6,800,000 Canadian Dollar ........... 5,798,584 11/13/07 360,732 --
834,892,500 Japanese Yen .............. 7,153,564 11/13/07 14,775 --
3,861,000 Polish Zloty .............. 1,306,953 11/13/07 91,258 --
27,820,000 Swedish Krona ............. 4,052,558 11/13/07 137,876 --
8,350,000 Singapore Dollar .......... 5,521,391 11/26/07 59,973 --
57,000,000 Japanese Yen .............. 497,469 11/27/07 -- (7,244)
67,360,000,000 Indonesian Rupiah ......... 7,302,845 12/03/07 -- (18,036)
4,402,925 Polish Zloty .............. 1,505,788 12/03/07 89,091 --
475,000,000 Korean Won ................ 506,937 12/05/07 5,787 --
266,870,000 Japanese Yen .............. 2,350,602 1/04/08 -- (44,838)
252,650,000 Korean Won ................ 270,851 1/04/08 2,017 --
7,250,000 Norwegian Krone ........... 1,194,202 1/04/08 28,264 --
2,514,355 Polish Zloty .............. 870,019 1/04/08 41,141 --
1,822,389 Canadian Dollar ........... 1,601,959 1/11/08 50,683 --
110,900,000 Japanese Yen .............. 963,008 1/11/08 -- (4,016)
178,636,250 Japanese Yen .............. 1,553,089 1/15/08 -- (7,607)
277,687,500 Japanese Yen .............. 2,415,409 1/16/08 -- (12,689)
1,400,000 Canadian Dollar ........... 1,247,994 1/22/08 21,883 --
742,401,000 Japanese Yen .............. 6,465,106 1/22/08 -- (36,724)
6,800,000 Singapore Dollar .......... 4,584,373 1/22/08 -- (21,104)
185,559,000 Japanese Yen .............. 1,620,037 1/28/08 -- (12,207)
135,564,000 Japanese Yen .............. 1,181,901 1/31/08 -- (6,897)
1,991,865 Polish Zloty .............. 726,905 1/31/08 -- (4,879)
95,200,000 Japanese Yen .............. 825,672 2/04/08 -- (11,430)
5,671,200 Malaysian Ringgit ......... 1,700,000 4/30/08 -- (13,690)
26 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
7. FORWARD EXCHANGE CONTRACTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT DATE GAIN LOSS
- ----------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
132,000,000 Thailand Baht ............. 3,888,071 8/20/07 $ 78,925 $ --
34,216,000 Thailand Baht ............. 1,006,353 9/04/07 18,333 --
--------------------------
Unrealized gain (loss) on forward exchange contracts ................. 3,085,414 (1,818,565)
--------------------------
Net unrealized gain on forward exchange contracts ................. $ 1,266,849
===========
8. 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 and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.
9. REGULATORY AND LITIGATION MATTERS
As part of various investigations by a number of federal, state, and foreign
regulators and governmental entities, including the Securities and Exchange
Commission ("SEC"), relating to certain practices in the mutual fund industry,
including late trading, market timing and marketing support payments to
securities dealers who sell fund shares ("marketing support"), Franklin
Resources, Inc. and certain of its subsidiaries (collectively, the "Company"),
entered into settlements with certain of those regulators and governmental
entities. Specifically, the Company entered into settlements with the SEC, among
others, concerning market timing and marketing support.
On June 23, 2006, the SEC approved the proposed plan of distribution for the
marketing support settlement, and disbursement of the settlement monies to the
designated funds, in accordance with the terms and conditions of that settlement
and plan, was completed in September 2006.
The plan of distribution for the market timing settlement is currently under
review by the SEC staff. After publication of notice of the plan and a 30-day
comment period, the proposed plan of distribution will be submitted to the SEC
for approval. Following the SEC's approval of the plan of distribution, with
modifications as appropriate, distribution of the settlement monies will begin
in accordance with the terms and conditions of the settlement and plan.
Semiannual Report | 27
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
9. REGULATORY AND LITIGATION MATTERS (CONTINUED)
In addition, the Company, as well as most of the mutual funds within Franklin
Templeton Investments and certain current or former officers, Company directors,
fund directors, and employees, have been named in private lawsuits (styled as
shareholder class actions, or as derivative actions on behalf of either the
named funds or Franklin Resources, Inc.). The lawsuits relate to the industry
practices referenced above, as well as to allegedly excessive commissions and
advisory and distribution fees.
The Company and fund management believe that the claims made in each of the
private lawsuits referenced above are without merit and intend to defend against
them vigorously. The Company cannot predict with certainty the eventual outcome
of these lawsuits, nor whether they will have a material negative impact on the
Company. If it is determined that the Company bears responsibility for any
unlawful or inappropriate conduct that caused losses to the Fund, it is
committed to making the Fund or its shareholders whole, as appropriate.
10. NEW ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
Interpretation of FASB Statement No. 109" ("FIN 48"), which clarifies the
accounting for uncertainty in tax positions taken or expected to be taken in a
tax return. FIN 48 provides guidance on the measurement, recognition,
classification and disclosure of tax positions, along with accounting for the
related interest and penalties. FIN 48 is effective for fiscal years beginning
after December 15, 2006, and is to be applied to all open tax years as of the
date of effectiveness. On December 22, 2006, the Securities and Exchange
Commission extended the implementation date to no later than the last net asset
value calculation in the first semi-annual reporting period in 2007. The Fund is
currently evaluating the impact, if any, of applying the various provisions of
FIN 48.
In September 2006, FASB issued FASB Statement No. 157, "Fair Value Measurement"
("SFAS 157"), which defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements. SFAS 157 is
effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. The Fund believes the adoption of SFAS 157
will have no material impact on its financial statements.
28 | Semiannual Report
Franklin Templeton Global Trust
MEETING OF SHAREHOLDERS, MARCH 21, 2007 AND RECONVENED ON APRIL 11, 2007 AND MAY
11, 2007
FRANKLIN TEMPLETON HARD CURRENCY FUND
A Special Meeting of Shareholders of the Trust was held at the Trust's offices,
One Franklin Parkway, San Mateo, California on March 21, 2007 and reconvened on
April 11, 2007 and May 11, 2007. The purpose of the meeting was to elect
Trustees of the Trust and to vote on the following Proposals and Sub-Proposals:
to approve an Amended and Restated Agreement and Declaration of Trust; to
approve amendments to certain of Franklin Templeton Hard Currency Fund's (the
"Fund") fundamental investment restrictions (including eight (8) Sub-Proposals);
to approve the elimintion of certain of the Fund's fundamental investment
restrictions; and to approve the reclassification of certain of the Fund's
investment policies as non-fundamental. At the meeting, the following persons
were elected by the shareholders to serve as Independent Trustees of the Trust:
Harris J. Ashton, Robert F. Carlson, Sam L. Ginn, Edith E. Holiday, Frank W. T.
LaHaye, Frank A. Olson, Larry D. Thompson and John B. Wilson. Charles B. Johnson
and Gregory E. Johnson were elected by the shareholders to serve as Interested
Trustees. Shareholders also approved the Amended and Restated Agreement and
Declaration of Trust, amendments to certain of the Fund's fundamental investment
restrictions (including eight (8) Sub-Proposals), the elimination of certain of
the Fund's fundamental investment restrictions and the reclassification of
certain of the Fund's investment policies as non-fundamental. No other business
was transacted at the meeting.
The results of the voting at the meeting are as follows:
Proposal 1. The election of Trustees:
- ---------------------------------------------------------------------------------------------------------
% OF % OF % OF % OF
OUTSTANDING VOTED OUTSTANDING VOTED
NAME FOR SHARES SHARES WITHHELD SHARES SHARES
- ---------------------------------------------------------------------------------------------------------
Harris J. Ashton .......... 24,408,541.682 58.491% 98.430% 389,397.361 .933% 1.570%
Robert F. Carlson ......... 24,411,374.454 58.497% 98.441% 386,564.589 .927% 1.559%
Sam L. Ginn ............... 24,412,345.126 58.500% 98.445% 385,593.917 .924% 1.555%
Edith E. Holiday .......... 24,400,488.495 58.471% 98.397% 397,450.548 .953% 1.603%
Frank W. T. LaHaye ........ 24,419,813.668 58.518% 98.475% 378,125.375 .906% 1.525%
Frank A. Olson ............ 24,413,216.578 58.502% 98.449% 384,722.465 .922% 1.551%
Larry D. Thompson ......... 24,426,180.033 58.533% 98.501% 371,759.010 .891% 1.499%
John B. Wilson ............ 24,426,591.717 58.534% 98.503% 371,347.326 .890% 1.497%
Charles B. Johnson ........ 24,419,215.531 58.516% 98.473% 378,723.512 .908% 1.527%
Gregory E. Johnson ........ 24,433,290.833 58.550% 98.530% 364,648.210 .874% 1.470%
Semiannual Report | 29
Franklin Templeton Global Trust
MEETING OF SHAREHOLDERS, MARCH 21, 2007 AND RECONVENED ON APRIL 11, 2007 AND MAY
11, 2007 (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
Proposal 2. To approve an Amended and Restated Agreement and Declaration of
Trust:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 16,093,683.001 38.566% 64.899%
Against .............................. 326,625.708 0.782% 1.317%
Abstain .............................. 372,332.334 0.893% 1.502%
Broker Non-votes ..................... 8,005,298.000 19.183% 32.282%
- -----------------------------------------------------------------------------------
TOTAL ................................ 24,797,939.043 59.424% 100.000%
- -----------------------------------------------------------------------------------
Proposal 3. To approve amendments to certain of the Fund's fundamental
investment restrictions (includes eight (8) Sub-Proposals):
(a) To amend the Fund's fundamental investment restriction regarding borrowing:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,360,213.598 41.601% 68.512%
Against .............................. 688,797.017 1.650% 2.718%
Abstain .............................. 487,750.421 1.169% 1.925%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
(b) To amend the Fund's fundamental investment restriction regarding
underwriting:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,349,084.958 41.574% 68.468%
Against .............................. 695,184.684 1.666% 2.743%
Abstain .............................. 492,491.394 1.180% 1.944%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
30 | Semiannual Report
Franklin Templeton Global Trust
MEETING OF SHAREHOLDERS, MARCH 21, 2007 AND RECONVENED ON APRIL 11, 2007 AND MAY
11, 2007 (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
(c) To amend the Fund's fundamental investment restriction regarding lending:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,308,283.356 41.476% 68.307%
Against .............................. 741,954.233 1.778% 2.928%
Abstain .............................. 486,523.447 1.166% 1.920%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
(d) To amend the Fund's fundamental investment restriction regarding investments
in real estate:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,259,988.763 41.360% 68.116%
Against .............................. 771,906.410 1.850% 3.047%
Abstain .............................. 504,865.863 1.210% 1.992%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
(e) To amend the Fund's fundamental investment restriction regarding investments
in commodities:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,345,856.711 41.566% 68.455%
Against .............................. 698,821.453 1.675% 2.758%
Abstain .............................. 492,082.872 1.179% 1.942%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
(f) To amend the Fund's fundamental investment restriction regarding issuing
senior securities:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,323,218.344 41.512% 68.366%
Against .............................. 713,069.004 1.709% 2.814%
Abstain .............................. 500,473.688 1.199% 1.975%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
Semiannual Report | 31
Franklin Templeton Global Trust
MEETING OF SHAREHOLDERS, MARCH 21, 2007 AND RECONVENED ON APRIL 11, 2007 AND MAY
11, 2007 (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
(g) To amend the Fund's fundamental investment restriction regarding industry
concentration:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,422,934.038 41.751% 68.759%
Against .............................. 599,280.590 1.436% 2.365%
Abstain .............................. 514,546.408 1.233% 2.031%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
(h) To amend the Fund's fundamental investment restriction regarding
diversification of investments:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,515,970.286 41.974% 69.126%
Against .............................. 535,482.112 1.283% 2.113%
Abstain .............................. 485,308.638 1.163% 1.916%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
Proposal 4. To approve the elimination of certain of the Fund's fundamental
investment restrictions:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,322,744.175 41.511% 68.364%
Against .............................. 688,473.903 1.650% 2.717%
Abstain .............................. 525,542.958 1.259% 2.074%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
32 | Semiannual Report
Franklin Templeton Global Trust
MEETING OF SHAREHOLDERS, MARCH 21, 2007 AND RECONVENED ON APRIL 11, 2007 AND MAY
11, 2007 (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
Proposal 5. To approve the reclassification of certain of the Fund's investment
policies as non-fundamental:
- -----------------------------------------------------------------------------------
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
- -----------------------------------------------------------------------------------
For .................................. 17,322,997.753 41.511% 68.365%
Against .............................. 709,820.000 1.701% 2.801%
Abstain .............................. 503,943.283 1.208% 1.989%
Broker Non-votes ..................... 6,802,223.000 16.300% 26.845%
- -----------------------------------------------------------------------------------
TOTAL ................................ 25,338,984.036 60.720% 100.000%
- -----------------------------------------------------------------------------------
Semiannual Report | 33
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT
At a meeting held February 27, 2007, the Board of Trustees ("Board"), including
a majority of non-interested or independent Trustees, approved renewal of the
investment management agreement for Franklin Templeton Hard Currency Fund
("Fund"). In reaching this decision, the Board took into account information
furnished throughout the year at regular Board meetings, as well as information
prepared specifically in connection with the annual renewal review process.
Information furnished and discussed throughout the year included investment
performance reports and related financial information for the Fund, as well as
periodic reports on shareholder services, legal, compliance, pricing, brokerage
commissions and execution and other services provided by the Investment Manager
("Manager") and its affiliates. Information furnished specifically in connection
with the renewal process included a report for the Fund prepared by Lipper, Inc.
("Lipper"), an independent organization, as well as a Fund profitability
analysis report prepared by management. The Lipper report compared the Fund's
investment performance and expenses with those of other mutual funds deemed
comparable to the Fund as selected by Lipper. The Fund profitability analysis
report discussed the profitability to Franklin Templeton Investments from its
overall U.S. fund operations, as well as on an individual fund-by-fund basis.
Included with such profitability analysis report was information on a
fund-by-fund basis listing portfolio managers and other accounts they manage, as
well as information on management fees charged by the Manager and its affiliates
including management's explanation of differences where relevant and a
three-year expense analysis with an explanation for any increase in expense
ratios. Additional material accompanying such report was a memorandum prepared
by management describing project initiatives and capital investments relating to
the services provided to the Fund by the Franklin Templeton Investments
organization, as well as a memorandum relating to economies of scale and a
comparative analysis concerning transfer agent fees charged the Fund.
In considering such materials, the independent Trustees received assistance and
advice from and met separately with independent counsel. In approving
continuance of the investment management agreement for the Fund, the Board,
including a majority of independent Trustees, determined that the existing
management fee structure was fair and reasonable and that continuance of the
investment management agreement was in the best interests of the Fund and its
shareholders. While attention was given to all information furnished, the
following discusses some primary factors relevant to the Board's decision.
NATURE, EXTENT AND QUALITY OF SERVICE. The Board was satisfied with the nature
and quality of the overall services provided by the Manager and its affiliates
to the Fund and its shareholders. In addition to investment performance and
expenses discussed later, the Board's opinion was based, in part, upon periodic
reports furnished them showing that the investment policies and restrictions for
the Fund were consistently complied with as well as other reports periodically
furnished the Board covering matters such as the compliance of portfolio
managers and other management personnel with the code of ethics adopted
throughout the Franklin Templeton
34 | Semiannual Report
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)
fund complex, the adherence to fair value pricing procedures established by the
Board, and the accuracy of net asset value calculations. The Board also noted
the extent of benefits provided Fund shareholders from being part of the
Franklin Templeton family of funds, including the right to exchange investments
between the same class of funds without a sales charge, the ability to reinvest
Fund dividends into other funds and the right to combine holdings in other funds
to obtain a reduced sales charge. Favorable consideration was given to
management's continuous efforts and expenditures in establishing back-up systems
and recovery procedures to function in the event of a natural disaster, it being
noted that such systems and procedures had functioned smoothly during the
Florida hurricanes and blackouts experienced in recent years. Consideration was
also given to the experience of the Fund's portfolio management team, the number
of accounts managed and general method of compensation. In this latter respect,
the Board noted that a primary factor in management's determination of a
portfolio manager's bonus compensation was the relative investment performance
of the funds he or she managed and that a portion of such bonus was required to
be invested in a pre-designated list of funds within such person's fund
management area so as to be aligned with the interests of Fund shareholders. The
Board also took into account the quality of transfer agent and shareholder
services provided Fund shareholders by an affiliate of the Manager, noting
continuing expenditures by management to increase and improve the scope of such
services, periodic favorable reports on such service conducted by third parties,
the high industry ranking given the Franklin Templeton website, and the
firsthand experience of individual Board members who deal with the shareholder
services department in their capacities as shareholders in one or more of the
various Franklin Templeton funds.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment
performance of the Fund in view of its importance to shareholders. In assessing
such performance, consideration was given to the Fund's performance as set forth
in the Lipper report furnished for the agreement renewal. The Lipper report
prepared for the Fund showed the investment performance of its Class A shares
during 2006, as well as for the previous 10 years ended December 31, 2006, in
comparison to a performance universe consisting of all retail and institutional
international income funds as selected by Lipper. The Lipper report showed the
Fund's income return during 2006 was in the second-highest quintile of its
performance universe and on an annualized basis was in the highest quintile of
such universe for the previous three- and five-year periods and in the
second-lowest quintile for the previous ten-year period. The Fund's total return
during 2006 placed it in the highest quintile of such universe as shown in the
Lipper report and its total return on an annualized basis during the previous
three- and five-year periods was also in the second-highest quintile of such
universe, and during the previous ten-year period was in the lowest quintile of
such universe. The investment objective of this Fund is to provide a hedge
against the U.S. dollar and the Fund's prospectus restriction requires it keep
the weighted maturity of its investments to less than 120 days, which differs
from many of the international funds in its performance universe.
Semiannual Report | 35
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)
In expressing its satisfaction, the Board took into account the Fund's
performance in view of such objective and restrictions as set forth in reports
furnished at Board meetings throughout the year, as well as its comparative
performance as shown in the Lipper report.
COMPARATIVE EXPENSES. Consideration was given to a comparative analysis of the
management fees and total expense ratios of the Fund compared with those of a
group of other funds selected by Lipper as its appropriate Lipper expense group
under the Lipper report. Prior to making such comparison, the Board relied upon
a survey showing that the scope of services covered under the Fund's investment
management agreement was similar to those provided by fund managers to other
mutual fund groups. In reviewing comparative costs, emphasis was given to the
Fund's contractual investment management fee in comparison with the contractual
investment management fee that would have been charged by other funds within its
Lipper expense group assuming they were similar in size to the Fund, as well as
the actual total expenses of the Fund in comparison with those of its peer
group. The Lipper contractual investment management fee analysis considers
administrative charges to be part of management fees, and total expenses, for
comparative consistency, are shown by Lipper for fund Class A shares. The
results of such expense comparisons showed that the contractual investment
management fee rate for the Fund was at the median for its Lipper expense group,
and its actual total expenses were below the median of such group. The Board was
satisfied with the management fee and total expenses of the Fund in comparison
to its Lipper expense group.
MANAGEMENT PROFITABILITY. The Board also considered the level of profits
realized by the Manager and its affiliates in connection with the operation of
the Fund. In this respect, the Board reviewed the Fund profitability analysis
that addresses the overall profitability of Franklin Templeton's U.S. fund
business, as well as its profits in providing management and other services to
the Fund. Specific attention was given to the methodology followed in allocating
costs to the Fund, it being recognized that allocation methodologies are
inherently subjective and various allocation methodologies may each be
reasonable while producing different results. In this respect, the Board noted
that, while being continuously refined and reflecting changes in the manager's
own cost accounting, the allocation methodology was consistent with that
followed in profitability report presentations for the Fund made in prior years
and that the Fund's independent registered public accounting firm had been
engaged by the Manager to perform certain procedures on a biennial basis,
specified and approved by the Manager and the Fund's Board solely for their
purposes and use in reference to the profitability analysis. In reviewing and
discussing such analysis, management discussed with the Board its belief that
costs incurred in establishing the infrastructure necessary for the type of
mutual fund operations conducted by the Manager and its affiliates may not be
fully reflected in the expenses allocated to the 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. The Board also took into account management's expenditures in
36 | Semiannual Report
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)
improving shareholder services provided the Fund, as well as the need to meet
additional regulatory and compliance requirements resulting from the
Sarbanes-Oxley Act and recent SEC requirements. In addition, the Board
considered a third-party study comparing the profitability of the Manager's
parent on an overall basis as compared to other publicly held managers broken
down to show profitability from management operations exclusive of distribution
expenses, as well as profitability including distribution expenses. The Board
also considered the extent to which the Manager and its affiliates might derive
ancillary benefits from fund operations, including its interest in a joint
venture entity that financed up-front commissions paid to brokers/dealers who
sold fund Class B shares prior to February 2005, when the offering of such
shares was discontinued, as well as potential benefits resulting from allocation
of fund brokerage and the use of "soft" commission dollars to pay for research.
Based upon its consideration of all these factors, the Board determined that the
level of profits realized by the Manager and its affiliates from providing
services to the Fund was not excessive in view of the nature, quality and extent
of services provided.
ECONOMIES OF SCALE. The Board also considered whether economies of scale are
realized by the Manager as the Fund grows larger and the extent to which this is
reflected in the level of management fees charged. While recognizing that any
precise determination is inherently subjective, the Board noted that based upon
the Fund profitability analysis, it appears that as some funds get larger, at
some point economies of scale do result in the Manager realizing a larger profit
margin on management services provided such a fund. The fee structure under the
Fund's investment management agreement provides for a management fee of 0.65% at
all asset levels. In considering the need for breakpoints, management expressed
the view that such fee schedule is low for this type of fund and anticipates
economies of scale that may exist as the Fund grows to a larger size. In support
of this position, management pointed out the Fund's favorable fee and expense
comparison within its Lipper expense group. The Board accepted management's
position but intends to monitor future growth in Fund assets and the
appropriateness of adding investment management fee breakpoints.
PROXY VOTING POLICIES AND PROCEDURES
The Trust 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 1-954/527-7678 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, 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.
Semiannual Report | 37
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
QUARTERLY STATEMENT OF INVESTMENTS
The Trust files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q 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
1-800/SEC-0330.
38 | Semiannual Report
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Literature Request
LITERATURE REQUEST. TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT
1-800/DIAL BEN(R) (1-800/342-5236) OR VISIT FRANKLINTEMPLETON.COM. INVESTORS
SHOULD CAREFULLY CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES
BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE
CAREFULLY READ THE PROSPECTUS BEFORE INVESTING. To ensure the highest quality of
service, we may monitor, record and access telephone calls to or from our
service departments. These calls can be identified by the presence of a regular
beeping tone.
FRANKLIN TEMPLETON FUNDS
INTERNATIONAL
Mutual European Fund
Templeton BRIC Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Emerging Markets Small Cap Fund
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund 1
GLOBAL
Mutual Discovery Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund 1
Templeton Growth Fund
Templeton World Fund
GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small Cap Growth Fund II 2
Franklin Small-Mid Cap Growth Fund
VALUE
Franklin Balance Sheet Investment Fund 1
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 1
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 3
Mutual Shares Fund
BLEND
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Global Real Estate Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Technology Fund
Franklin Utilities Fund
Mutual Financial Services Fund
ASSET ALLOCATION
Franklin Templeton Corefolio(R) Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives Allocation Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund
INCOME
Franklin Adjustable U.S. Government Securities Fund 4
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund 5
Franklin Income Fund
Franklin Limited Maturity U.S. Government Securities Fund 4
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund 4
Templeton Global Bond Fund
Templeton Income Fund
TAX-FREE INCOME 6
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 7
LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income
Fund New York Limited-Term Tax-Free Income Fund
INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund
STATE-SPECIFIC
Alabama
Arizona
California 8
Colorado
Connecticut
Florida 8
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 7
Michigan 7
Minnesota 7
Missouri
New Jersey
New York 8
North Carolina
Ohio 7
Oregon
Pennsylvania
Tennessee
Virginia
INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust 9
1. The fund is open only to existing shareholders and select retirement plans.
2. The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.
3. The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.
4. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
5. Effective 10/1/06, Franklin's AGE High Income Fund changed its name to
Franklin High Income Fund. The fund's investment goal and strategy remained the
same.
6. For investors subject to the alternative minimum tax, a small portion of fund
dividends may be taxable. Distributions of capital gains are generally taxable.
7. The fund invests primarily in insured municipal securities.
8. These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
limited-term, intermediate-term and money market portfolios (CA and NY).
9. The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.
05/07 Not part of the semiannual report
[LOGO](R)
FRANKLIN TEMPLETON One Franklin Parkway
INVESTMENTS San Mateo, CA 94403-1906
o WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?
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SEMIANNUAL REPORT AND SHAREHOLDER LETTER
FRANKLIN TEMPLETON
HARD CURRENCY FUND
INVESTMENT MANAGER
Franklin Advisers, Inc.
DISTRIBUTOR
Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com
SHAREHOLDER SERVICES
1-800/632-2301
Authorized for distribution only when accompanied or preceded by a prospectus.
Investors should carefully consider a fund's investment goals, risks, charges
and expenses before investing. The prospectus contains this and other
information; please read it carefully before investing.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.
412 S2007 06/07
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 12(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 expert is John B. Wilson and he is
"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 ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 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-CSR, 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 significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer
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.
FRANKLIN TEMPLETON GLOBAL TRUST
By /S/JIMMY D. GAMBILL
-------------------
Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date June 27, 2007
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/JIMMY D. GAMBILL
-------------------
Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date June 27, 2007
By /S/GALEN G. VETTER
------------------
Galen G. Vetter
Chief Financial Officer
Date June 27, 2007