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 GLOBAL 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: 4/30/08
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ITEM 1. REPORTS TO STOCKHOLDERS.
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APRIL 30, 2008
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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
sign up for eDelivery at
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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[GRAPHIC OMITTED]
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
Shareholder Information ................................................... 28
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Shareholder Letter
Dear Shareholder:
During the six months ended April 30, 2008, emerging market economies, such as
those in Asia and non-euro Europe, exhibited robust growth while the U.S.,
eurozone and other developed economies experienced slower growth. Overall,
rising commodity prices contributed to inflationary pressures worldwide and the
global credit crunch fostered financial market uncertainty. The U.S. dollar also
continued to struggle as it depreciated against most major currencies. Monetary
policy actions varied as the U.S. decreased interest rates, the eurozone left
rates steady and China increased rates.
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.
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Sign up for eDELIVERY of your Shareholder Report
Shareholders who are registered at franklintempleton.com can receive this report
via email by selecting eDelivery options under "My Profile." 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
Although market conditions are constantly changing, we remain committed to our
disciplined strategy as we manage the Fund, keeping in mind the trust you have
placed in us. As always, we recommend investors consult their financial advisors
and review their portfolios to design a long-term strategy and portfolio
allocation 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, 2008. 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, 2008.
PERFORMANCE OVERVIEW
Franklin Templeton Hard Currency Fund - Class A posted a +4.63% 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 +7.02% 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 2.36% relative to
its major U.S. trading partners during the period. 2 The dollar declined 9.35%
versus the Japanese yen and 7.07% 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).
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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CURRENCY BREAKDOWN
4/30/08
% OF TOTAL
NET ASSETS
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ASIA PACIFIC 50.4%
Japanese Yen 25.2%
Singapore Dollar 16.3%
Malaysian Ringgit 4.4%
Australian Dollar 2.7%
Indonesian Rupiah 1.1%
Kazakhstani Tenge 0.7%
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EUROPE 32.6%
Swiss Franc 16.5%
Swedish Krona 8.6%
Norwegian Krone 5.1%
Polish Zloty 2.4%
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AMERICAS 17.0%
U.S. Dollar 11.4%
Canadian Dollar 5.6%
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ECONOMIC AND MARKET OVERVIEW
The six months under review were characterized by the continued fall-out of
markets and the global economy from the U.S. subprime crisis and ongoing credit
deleveraging. Global monetary policy authorities faced a dilemma of weakening
growth and rising commodity-based inflation amid financial market distress.
U.S. gross domestic product (GDP) growth slowed markedly during the period to
annualized rates of 0.6% in the fourth quarter of 2007 and an estimated 0.9% in
the first quarter of 2008. U.S. consumer confidence plunged as house prices
fell, food and energy costs rose and the labor market softened. The operating
environment was also challenging for many businesses. Corporate earnings came
under pressure, particularly in the bank and construction sectors, leading to a
260,000 payroll decline in the first four months of 2008 and an unemployment
rate increase to 5.0% in April 2008%. 4 Although inflation during the period was
largely driven by food and energy costs, underlying (core) inflation was above
the Federal Reserve Board's (Fed's) comfort zone at 2.3% in April. 4 Given
financial system liquidity pressures and downside risks to U.S. economic growth,
the Fed lowered the federal funds target rate 250 basis points (bps) from 4.50%
to 2.00% during the six months under review.
With aggressive U.S. interest rate easing, the difference in interest rates set
by the European Central Bank (ECB) over Fed policy rates widened. Given that the
ECB's primary objective is price stability rather than growth, it left interest
rates unchanged at 4.00% during the period. With economic growth moderating more
slowly than in the U.S. and labor markets holding steady, the ECB remained on
guard against high food and energy prices filtering into underlying prices. At
period-end, the gap between eurozone headline and core prices remained wide with
April headline inflation at 3.3% and core inflation at 1.6%. 5 While eurozone
first quarter 2008 GDP growth registered 2.2% year-over-year, business and
consumer confidence indicators showed signs of a slowing economy. 5 Economic
growth in the non-euro European countries largely continued to outpace the
eurozone's. Strong investment and consumer spending supported robust economic
growth in Poland, 6.1% year-over-year in fourth quarter 2007, underpinned by
strong household borrowing, rising real incomes and the long-term convergence
process to western Europe. 5 First quarter 2008 GDP rose 4.8% year-over-year in
Norway and fourth quarter 2007 GDP rose 2.8% year-over-year in Sweden. 6 Norway
and Sweden were relatively more insulated from the liquidity tensions in the
money and financial markets compared with
4. Source: Bureau of Labor Statistics.
5. Source: Eurostat.
6. Sources: Statistics Norway; Statistics Sweden.
4 | Semiannual Report
the eurozone. Labor markets remained relatively strong in both countries where
in Sweden fiscal policy resulted in tax cuts and in Norway high oil prices
increased revenues that supported government spending. Rising wage and cost
pressures prompted the central banks of these economies to continue hiking
interest rates despite the global credit shock.
While U.S. economic growth weakened, Asia, the emerging markets and commodity
producers supported global growth against moderating forces. In Asia, growth
momentum remained resilient but moderated due to reduced external demand. China
remained an important contributor to regional growth. China's GDP growth
registered 10.6% year-over-year in first quarter 2008, although somewhat lower
than last year's peak growth. 7 Economic growth remained reasonably strong in
other Asian countries, rising 7.3% in Malaysia year-over-year in fourth quarter
2007 and 7.2% in Singapore year-over-year in first quarter 2008. 8 Chinese
monetary authorities continued to tighten credit conditions. However, inflation
pressures picked up, primarily reflecting higher global commodity prices, and
China's consumer price inflation jumped to 8.5% in April 2008. 7 Many Asian
countries continued to generate large current account surpluses and accumulate
foreign exchange reserves. In addition to Asia, commodity producing countries
accumulated surpluses as oil prices approached $120 per barrel in April 2008.
With increased risk aversion and volatile equity performance, Asian sovereign
wealth funds helped provide stability to U.S. and European financial systems
through bank recapitalization.
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.
MANAGER'S DISCUSSION
The Fund continued to act as a hedge against U.S. dollar as the dollar fell
2.36% relative to its major trading partners during the period. 2 The U.S.
dollar depreciated as the U.S. failed to attract sufficient capital flows to
finance its 4.9% of GDP current account deficit. 9 We retained our negative
outlook on the U.S. dollar due to the magnitude of the current account deficit
and
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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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7. Source: National Bureau of Statistics.
8. Sources: Department of Statistics Malay; Singapore Department of Statistics.
9. Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Semiannual Report | 5
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WHAT IS A CARRY TRADE?
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A strategy in which an investor sells a certain currency with a relatively low
interest rate and uses the funds to purchase a different currency yielding a
higher interest rate. A trader using this strategy attempts to capture the
difference between the rates.
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vulnerability to financing it given a negative interest rate differential with
other major central bank rates and prospects for a protracted period of low
growth. We increasingly focused on regional differentiation between Asia and
Europe and sought to position the Fund in currencies with what we assessed as
attractive valuations and fundamentals.
ASIA
During the period, the Fund benefited from exposure to currencies of countries
with large current account surpluses that were previously used to fund the carry
trade and benefited from rising global market volatility. One example was the
Japanese yen, which appreciated 10.31% against the U.S. dollar. 3 While Japan's
inflation and interest rates remained low, the country's current account surplus
relative to GDP increased to 4.1% of GDP in 2007. 10 Our other Asian currency
positions lagged the JPM 3 Month Global Cash Index's return, but outperformed
the U.S. dollar on a trade-weighted basis. For example, the Singapore dollar
rose 6.71% and the Malaysian ringgit 5.57%, while the Indonesian rupiah declined
1.36%. 3 In our view, Asia was well positioned to use currency appreciation as a
tool for moderating commodity price pressures given the region's favorable
current account positions. An example is Singapore where the Monetary Authority
of Singapore increased its trade-weighted currency target band to help alleviate
inflation despite its expectation for more moderate growth.
EUROPE
European currencies generated strong gains against the U.S. dollar. The euro
reached record levels against the U.S. dollar as the ECB maintained interest
rates while the Fed eased, ending the period 7.61% stronger against the U.S.
dollar. 3 We reduced our euro exposure during the period given our assessment
that the global economy's cyclical slowing could negatively impact Europe more
than Asia. While the weak U.S. dollar cycle resulted in some narrowing of the
U.S. current account deficit, trade imbalances persisted particularly between
the U.S. and Asia. For example, the U.S.'s 12-month bilateral trade deficit with
Asia registered $389 billion in March. 9 Additionally, the euro appreciated
strongly even though bilateral imbalances with Europe were significantly lower
than with Asia. The U.S. trade deficit with the European Union was $107 billion,
or about a third of that with Asia. 9 Since January 2002 when the weak U.S.
dollar cycle began, the euro appreciated 74.85% against the U.S. dollar. 3
Therefore, we believe the euro was overvalued against the U.S. dollar and Asian
currencies.
10. Source: Economic & Social Research Institute.
6 | Semiannual Report
The Fund's underweighted euro position relative to the JPM 3 Month Global Cash
Index detracted from relative performance as the euro slightly outperformed the
index. Additionally, exposure to other European currencies together positively
impacted the Fund as these currencies outperformed the euro. The Polish zloty
rose 13.03% against the U.S. dollar during the six-month period. 3 The currency
benefited from positive growth and interest rate differentials over the U.S. and
eurozone. The National Bank of Poland hiked interest rates 100 bps to 5.75%. The
Swiss franc also boosted relative performance, rising 11.28%. 3 Similar to the
yen, the franc benefited from increasing risk aversion and a large current
account surplus of 15.1% of GDP. 11 The Swedish krona and Norwegian krone also
produced strong gains against the U.S. dollar but lagged the benchmark index.
The Swedish krona appreciated 6.13% and the Norwegian krone 5.51%. 3 In addition
to large double-digit current account surpluses, the currencies also benefited
from interest rate increases of 25 bps and 50 bps.
AMERICAS
Although Fed policy may have averted a deeper financial crisis, we remained
cautious in our global growth outlook and anticipated the process of
deleveraging and releveraging to be a lengthy one. Deteriorating U.S. growth
prospects and interest rate reductions weighed on the performance of the
Canadian dollar, which fell 5.69% against the U.S. dollar and detracted from
Fund performance relative to the benchmark index. 3 During the period, the Bank
of Canada reduced interest rates 150 bps to 3.00%. We significantly reduced our
position in the currency given the country's close links with the U.S. and
rising U.S. recessionary risks that could create spillover effects into the
Canadian economy and because the Canadian current account deteriorated.
11. Source: Swiss National Bank.
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, 2008, 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 67.2% of its total investments in U.S.
dollar-denominated assets as of 4/30/08, its net exposure to the U.S. dollar as
of that date was only 11.4%. The difference is explained by the Fund's holdings
of forward currency exchange contracts (please see Note 6 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 4/30/08
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 4/30/08 10/31/07
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Net Asset Value (NAV) -$0.21 $9.95 $10.16
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DISTRIBUTIONS (11/1/07-4/30/08)
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Dividend Income $0.6435
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ADVISOR CLASS (SYMBOL: ICHHX) CHANGE 4/30/08 10/31/07
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Net Asset Value (NAV) -$0.21 $9.97 $10.18
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DISTRIBUTIONS (11/1/07-4/30/08)
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Dividend Income $0.6570
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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. UNTIL AUGUST 31,
2008, 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 +4.63% +12.88% +47.93% +68.31%
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Average Annual Total Return 2 +2.32% +10.35% +7.66% +5.10%
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Value of $10,000 Investment 3 $10,232 $11,035 $14,461 $16,452
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Avg. Ann. Total Return (3/31/08) 4 +13.30% +8.24% +5.38%
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Distribution Rate 5 1.31%
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30-Day Standardized Yield 6 1.02%
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Total Annual Operating Expenses 7 1.09%
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ADVISOR CLASS 6-MONTH 1-YEAR 5-YEAR 10-YEAR
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Cumulative Total Return 1 +4.76% +13.16% +50.43% +73.68%
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Average Annual Total Return 2 +4.76% +13.16% +8.51% +5.68%
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Value of $10,000 Investment 3 $10,476 $11,316 $15,043 $17,368
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Avg. Ann. Total Return (3/31/08) 4 +16.22% +9.08% +5.97%
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Distribution Rate 5 1.66%
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30-Day Standardized Yield 6 1.31%
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Total Annual Operating Expenses 7 0.84%
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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 4/30/08.
6. Yield, calculated as required by the SEC, is based on the earnings of the
Fund's portfolio for the 30 days ended 4/30/08.
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.
- ------------------------------------------------------------------------------------------------------------
BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
CLASS A VALUE 11/1/07 VALUE 4/30/08 PERIOD* 11/1/07-4/30/08
- ------------------------------------------------------------------------------------------------------------
Actual $ 1,000 $ 1,046.30 $ 5.44
- ------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000 $ 1,019.54 $ 5.37
- ------------------------------------------------------------------------------------------------------------
ADVISOR CLASS
- ------------------------------------------------------------------------------------------------------------
Actual $ 1,000 $ 1,047.60 $ 3.92
- ------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000 $ 1,021.03 $ 3.87
- ------------------------------------------------------------------------------------------------------------
* Expenses are calculated using the most recent six-month expense ratio,
annualized for each class (A: 1.07% and Advisor: 0.77%), multiplied by the
average account value over the period, multiplied by 182/366 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, 2008 YEAR ENDED OCTOBER 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
-------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning of
period ........................... $ 10.16 $ 9.39 $ 9.34 $ 9.85 $ 9.59 $ 8.56
-------------------------------------------------------------------------------------------
Income from investment operations a:
Net investment income b .......... 0.08 0.28 0.24 0.15 0.09 0.11
Net realized and unrealized gains
(losses) ....................... 0.35 0.84 0.47 (0.12) 0.78 1.46
-------------------------------------------------------------------------------------------
Total from investment operations .... 0.43 1.12 0.71 0.03 0.87 1.57
-------------------------------------------------------------------------------------------
Less distributions from:
Net investment income and net
realized foreign currency
gains ........................ (0.64) (0.35) (0.66) (0.46) (0.61) (0.54)
Net realized gains ............... -- -- -- (0.08) -- --
-------------------------------------------------------------------------------------------
Total distributions ................. (0.64) (0.35) (0.66) (0.54) (0.61) (0.54)
-------------------------------------------------------------------------------------------
Redemption fees ..................... -- e -- e -- e -- e -- e --
-------------------------------------------------------------------------------------------
Net asset value, end of period ...... $ 9.95 $ 10.16 $ 9.39 $ 9.34 $ 9.85 $ 9.59
===========================================================================================
Total return c ...................... 4.63% 12.31% 8.06% 0.17% 9.44% 19.05%
RATIOS TO AVERAGE NET ASSETS d
Expenses ............................ 1.07% f 1.09% f 1.13% f 1.19% f 1.24% f 1.32%
Net investment income ............... 1.61% 2.97% 2.58% 1.54% 0.95% 1.19%
SUPPLEMENTAL DATA
Net assets, end of period (000's) ... $ 528,499 $ 323,255 $ 322,449 $ 190,163 $ 211,098 $ 143,715
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 Ratios are annualized for periods less than one year.
e Amount rounds to less than $0.01 per share.
f Benefit of expense reduction rounds to less than 0.01%.
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, 2008 YEAR ENDED OCTOBER 31,
ADVISOR CLASS (UNAUDITED) 2007 2006 2005 2004 2003
-------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning of
period ........................... $ 10.18 $ 9.41 $ 9.36 $ 9.87 $ 9.61 $ 8.58
-------------------------------------------------------------------------------------------
Income from investment operations a:
Net investment income b .......... 0.09 0.31 0.27 0.18 0.13 0.14
Net realized and unrealized gains
(losses) ....................... 0.36 0.84 0.47 (0.12) 0.79 1.46
-------------------------------------------------------------------------------------------
Total from investment operations .... 0.45 1.15 0.74 0.06 0.92 1.60
-------------------------------------------------------------------------------------------
Less distributions from:
Net investment income and net
realized foreign currency
gains ........................ (0.66) (0.38) (0.69) (0.49) (0.66) (0.57)
Net realized gains ............... -- -- -- (0.08) -- --
-------------------------------------------------------------------------------------------
Total distributions ................. (0.66) (0.38) (0.69) (0.57) (0.66) (0.57)
-------------------------------------------------------------------------------------------
Redemption fees ..................... -- e -- e -- e -- e -- e --
-------------------------------------------------------------------------------------------
Net asset value, end of period ...... $ 9.97 $ 10.18 $ 9.41 $ 9.36 $ 9.87 $ 9.61
===========================================================================================
Total return c ...................... 4.76% 12.60% 8.35% 0.50% 9.89% 19.45%
RATIOS TO AVERAGE NET ASSETS d
Expenses ............................ 0.77% f 0.84% f 0.83% f 0.83% f 0.84% f 0.92%
Net investment income ............... 1.91% 3.22% 2.88% 1.89% 1.35% 1.59%
SUPPLEMENTAL DATA
Net assets, end of period (000's) ... $ 138,261 $ 89,942 $ 40,912 $ 17,532 $ 22,442 $ 10,163
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 Ratios are annualized for periods less than one year.
e Amount rounds to less than $0.01 per share.
f Benefit of expense reduction rounds to less than 0.01%.
14 | The accompanying notes are an integral part of these financial statements.
| Semiannual Report
Franklin Templeton Global Trust
STATEMENT OF INVESTMENTS, APRIL 30, 2008 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON HARD CURRENCY FUND PRINCIPAL AMOUNT a VALUE
- ---------------------------------------------------------------------------------------------------------------
CORPORATE BOND (COST $20,931,614) 3.5%
Landwirtschaftliche Rentenbank (Germany), senior note, 0.65%, 9/30/08 .. 2,400,000,000 JPY $ 23,055,458
-------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES 27.9%
b Canada Treasury Bills,
6/12/08 ........................................................... 8,400,000 CAD 8,314,006
9/04/08 ........................................................... 14,100,000 CAD 13,838,815
Government of Singapore,
5.625%, 7/01/08 ................................................... 47,185,000 SGD 35,064,210
4.375%, 1/15/09 ................................................... 64,550,000 SGD 48,725,588
b Government of Sweden, Strip,
6/18/08 ........................................................... 182,000,000 SEK 30,250,799
9/17/08 ........................................................... 27,000,000 SEK 4,442,184
b Norway Treasury Bill, 6/18/08 .......................................... 52,350,000 NOK 10,217,960
Province of Quebec (Canada), 3.50%, 9/17/08 ............................ 10,000,000 CHF 9,672,785
b Sweden Treasury Bill, 12/17/08 ......................................... 82,100,000 SEK 13,368,342
Victoria Treasury Bond (Australia), 7.50%, 8/15/08 ..................... 13,000,000 AUD 12,273,984
-------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES
(COST $177,382,985) ................................................. 186,168,673
-------------
U.S. GOVERNMENT AND AGENCY SECURITIES 67.2%
b FHLB, 5/01/08 .......................................................... 30,472,000 30,472,000
b U.S. Treasury Bills
5/01/08 ........................................................... 45,000,000 45,000,000
5/22/08 ........................................................... 89,000,000 88,945,888
5/29/08 ........................................................... 94,000,000 93,914,930
6/05/08 ........................................................... 90,000,000 89,891,280
7/10/08 ........................................................... 50,000,000 49,874,300
7/17/08 ........................................................... 50,000,000 49,860,650
-------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(COST $447,929,477) ................................................. 447,959,048
-------------
TOTAL INVESTMENTS (COST $646,244,076) 98.6% ............................ 657,183,179
NET UNREALIZED GAIN ON FORWARD EXCHANGE CONTRACTS 1.4% ................. 9,264,645
OTHER ASSETS, LESS LIABILITIES 0.0% c .................................. 311,593
-------------
NET ASSETS 100.0% ...................................................... $ 666,759,417
=============
CURRENCY ABBREVIATIONS
AUD - Australian Dollar
CAD - Canadian Dollar
CHF - Swiss Franc
JPY - Japanese Yen
NOK - Norwegian Krone
SEK - Swedish Krona
SGD - Singapore Dollar
SELECTED PORTFOLIO ABBREVIATION
FHLB - Federal Home Loan Bank
a The principal amount is stated in U.S. dollars unless otherwise indicated.
b The security is traded on a discount basis with no stated coupon rate.
c Rounds to less than 0.1% of net assets.
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, 2008 (unaudited)
------------------
FRANKLIN TEMPLETON
HARD CURRENCY FUND
------------------
Assets:
Investments in securities:
Cost ............................................................... $ 646,244,076
==================
Value .............................................................. $ 657,183,179
Cash ................................................................. 3,644
Foreign currency, at value (cost $6,332) ............................. 6,197
Receivables:
Capital shares sold ................................................ 4,904,210
Interest ........................................................... 1,730,780
Unrealized gain on forward exchange contracts (Note 6) ............... 14,327,596
------------------
Total assets ..................................................... 678,155,606
------------------
Liabilities:
Payables:
Capital shares redeemed ............................................ 5,796,734
Affiliates ......................................................... 489,490
Unrealized loss on forward exchange contracts (Note 6) ............... 5,062,951
Accrued expenses and other liabilities ............................... 47,014
------------------
Total liabilities ................................................ 11,396,189
------------------
Net assets, at value ........................................... $ 666,759,417
==================
Net assets consist of:
Paid-in capital .................................................... $ 638,994,682
Distributions in excess of net investment income ................... (8,867,327)
Net unrealized appreciation (depreciation) ......................... 20,244,706
Accumulated net realized gain (loss) ............................... 16,387,356
------------------
Net assets, at value ........................................... $ 666,759,417
==================
CLASS A:
Net assets, at value ................................................. $ 528,498,675
==================
Shares outstanding ................................................... 53,102,493
==================
Net asset value per share a .......................................... $9.95
==================
Maximum offering price per share (net asset value per share /
97.75%) ........................................................... $ 10.18
==================
ADVISOR CLASS:
Net assets, at value ................................................. $ 138,260,742
==================
Shares outstanding ................................................... 13,861,077
==================
Net asset value and maximum offering price per share ................. $ 9.97
==================
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, 2008 (unaudited)
------------------
FRANKLIN TEMPLETON
HARD CURRENCY FUND
------------------
Investment income:
Interest ............................................................. $ 6,946,634
------------------
Expenses:
Management fees (Note 3a) ............................................ 1,681,916
Distribution fees: (Note 3c)
Class A ............................................................ 620,033
Transfer agent fees (Note 3e) ........................................ 204,797
Custodian fees (Note 4) .............................................. 11,777
Reports to shareholders .............................................. 39,251
Registration and filing fees ......................................... 40,188
Professional fees .................................................... 23,085
Trustees' fees and expenses .......................................... 13,276
Other ................................................................ 527
------------------
Total expenses ................................................... 2,634,850
Expense reductions (Note 4) ...................................... (10,975)
------------------
Net expenses ................................................... 2,623,875
------------------
Net investment income ........................................ 4,322,759
------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ........................................................ 9,560,469
Foreign currency transactions ...................................... 9,160,846
------------------
Net realized gain (loss) ..................................... 18,721,315
------------------
Net change in unrealized appreciation (depreciation) on:
Investments ....................................................... 263,283
Translation of assets and liabilities denominated in foreign
currencies ..................................................... (310,635)
------------------
Net change in unrealized appreciation (depreciation) ......... (47,352)
------------------
Net realized and unrealized gain (loss) ................................. 18,673,963
------------------
Net increase (decrease) in net assets resulting from operations ......... $ 22,996,722
==================
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, 2008 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2007
------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income .................................................................. $ 4,322,759 $ 10,939,596
Net realized gain (loss) from investments and foreign currency transactions ............ 18,721,315 13,540,841
Net change in unrealized appreciation (depreciation) on investments and translation of
assets and liabilities denominated in foreign currencies ............................. (47,352) 17,654,981
------------------------------------
Net increase (decrease) in net assets resulting from operations .................... 22,996,722 42,135,418
------------------------------------
Distributions to shareholders from:
Net investment income and net realized foreign currency gains:
Class A .............................................................................. (22,714,165) (11,331,337)
Advisor Class ........................................................................ (6,577,525) (2,385,571)
------------------------------------
Total distributions to shareholders ...................................................... (29,291,690) (13,716,908)
------------------------------------
Capital share transactions: (Note 2)
Class A ................................................................................ 209,933,519 (21,691,994)
Advisor Class .......................................................................... 49,921,723 43,108,617
------------------------------------
Total capital share transactions ......................................................... 259,855,242 21,416,623
------------------------------------
Redemption fees .......................................................................... 1,369 1,838
------------------------------------
Net increase (decrease) in net assets .............................................. 253,561,643 49,836,971
Net assets:
Beginning of period ...................................................................... 413,197,774 363,360,803
------------------------------------
End of period ............................................................................ $ 666,759,417 $ 413,197,774
====================================
Undistributed net investment income (distributions in excess of net investment income)
included in net assets:
End of period ............................................................................ $ (8,867,327) $ 16,101,604
====================================
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 (Trust) is registered under the Investment
Company Act of 1940, as amended, (1940 Act) as a non-diversified, open-end
investment company, consisting of one fund, the Franklin Templeton Hard Currency
Fund (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.
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 availability (including the reliability) of the value of a portfolio
security held by the Fund. 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.
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)
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.
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.
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)
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 of
America. 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.
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.
Semiannual Report | 21
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 directors 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, 2008, there were an unlimited number of shares authorized (without
par value). Transactions in the Fund's shares were as follows:
----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCTOBER 31, 2007
----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------
CLASS A SHARES:
Shares sold ......................... 27,134,050 $ 268,231,042 15,120,203 $ 145,232,340
Shares issued in reinvestment
of distributions ................. 1,682,038 15,882,460 835,035 7,890,170
Shares redeemed ..................... (7,522,854) (74,179,983) (18,489,325) (174,814,504)
----------------------------------------------------------------
Net increase (decrease) ............. 21,293,234 $ 209,933,519 (2,534,087) $ (21,691,994)
================================================================
ADVISOR CLASS SHARES:
Shares sold ......................... 6,049,155 $ 60,262,347 6,133,043 $ 58,846,188
Shares issued in reinvestment
of distributions ................. 535,846 5,077,231 166,518 1,583,623
Shares redeemed ..................... (1,557,646) (15,417,855) (1,814,162) (17,321,194)
----------------------------------------------------------------
Net increase (decrease) ............. 5,027,355 $ 49,921,723 4,485,399 $ 43,108,617
================================================================
22 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
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 a distribution plan 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 assets for costs incurred in connection
with the servicing, sale and distribution of the Fund's shares up to the maximum
annual plan rate. Under the Class A reimbursement distribution plan, costs
exceeding the maximum for the current plan year cannot be reimbursed in
subsequent periods.
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 charges retained net of commissions paid to
unaffiliated broker/dealers ..................................... $ 61,153
Contingent deferred sales charges retained ......................... $ 1,433
E. TRANSFER AGENT FEES
For the period ended April 30, 2008, the Fund paid transfer agent fees of
$204,797, of which $104,737 was retained by Investor Services.
Semiannual Report | 23
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
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, 2008, 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, 2007, 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, 2008, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments ............................ $ 647,026,475
=============
Unrealized appreciation ........................ $ 10,287,779
Unrealized depreciation ........................ (131,075)
-------------
Net unrealized appreciation (depreciation) ..... $ 10,156,704
=============
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 (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
6. FORWARD EXCHANGE CONTRACTS
At April 30, 2008, the Fund had the following forward exchange contracts
outstanding:
--------------------------------------------------
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT DATE GAIN LOSS
--------------------------------------------------
CONTRACTS TO BUY
13,700,000 Malaysian Ringgit ...... 4,124,022 5/15/08 $ 211,833 $ --
650,000,000 Japanese Yen ........... 5,653,895 5/15/08 600,643 --
840,000 Polish Zloty ........... 295,317 5/16/08 84,151 --
168,570,000 Japanese Yen ........... 1,449,927 5/27/08 173,370 --
2,791,880 Polish Zloty ........... 998,455 6/05/08 260,498 --
2,930,598 Australian Dollar ...... 2,364,407 6/05/08 386,621 --
4,568,615 Swiss Franc ............ 3,865,811 6/05/08 545,447 --
9,300,000 Norwegian Krone ........ 1,648,469 6/16/08 170,203 --
5,000,000 Singapore Dollar ....... 3,368,364 6/16/08 326,116 --
4,800,000 Polish Zloty ........... 1,771,675 6/16/08 390,627 --
436,320,000 Kazakhstani Tenge ...... 3,600,000 6/26/08 1,007 --
4,920,000 Canadian Dollar ........ 4,823,529 6/27/08 59,258 --
3,500,000 Singapore Dollar ....... 2,375,297 6/27/08 212,051 --
2,750,000 Swiss Franc ............ 2,397,977 6/27/08 257,803 --
6,900,000 Polish Zloty ........... 2,580,404 6/27/08 524,776 --
290,000,000 Japanese Yen ........... 2,459,503 6/30/08 338,462 --
34,550,000 Malaysian Ringgit ...... 10,458,605 7/16/08 463,804 --
1,800,000 Polish Zloty ........... 687,968 7/17/08 120,709 --
255,000,000 Japanese Yen ........... 2,189,123 7/18/08 273,826 --
8,350,000 Singapore Dollar ....... 5,882,767 8/27/08 303,610 --
67,360,000,000 Indonesian Rupiah ...... 7,158,342 9/04/08 -- (2,345)
4,402,925 Polish Zloty ........... 1,780,974 9/04/08 188,558 --
6,800,000 Canadian Dollar ........ 6,727,345 9/12/08 17,884 --
700,000,000 Japanese Yen ........... 6,400,878 9/16/08 380,461 --
12,312,000 Malaysian Ringgit ...... 3,725,265 9/29/08 163,741 --
1,150,650,000 Japanese Yen ........... 10,173,740 10/15/08 988,775 --
1,991,865 Polish Zloty ........... 799,528 11/03/08 86,754 --
512,800,000 Japanese Yen ........... 4,621,902 11/05/08 357,879 --
3,600,000 Swiss Franc ............ 3,257,402 11/06/08 219,259 --
24,287,655 Swedish Krona .......... 3,687,490 11/12/08 326,519 --
925,000,000 Japanese Yen ........... 8,507,312 11/13/08 478,901 --
834,892,500 Japanese Yen ........... 7,874,859 11/14/08 236,379 --
2,200,000 Australian Dollar ...... 1,895,300 11/17/08 122,821 --
2,724,300 Polish Zloty ........... 1,090,418 11/21/08 119,980 --
4,537,463 Swiss Franc ............ 4,169,312 11/21/08 212,528 --
57,000,000 Japanese Yen ........... 545,194 11/28/08 8,965 --
9,782,100 Swiss Franc ............ 9,000,000 11/28/08 446,435 --
122,734,000 Japanese Yen ........... 1,148,313 12/05/08 45,332 --
7,250,000 Norwegian Krone ........ 1,313,406 12/08/08 81,424 --
Semiannual Report | 25
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
6. FORWARD EXCHANGE CONTRACTS (CONTINUED)
----------------------------------------------------
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT DATE GAIN LOSS
----------------------------------------------------
CONTRACTS TO BUY (CONTINUED)
2,514,355 Polish Zloty ........... 1,006,225 12/08/08 $ 109,346 $ --
266,870,000 Japanese Yen ........... 2,467,135 12/08/08 128,688 --
6,179,000 Malaysian Ringgit ...... 1,955,380 12/10/08 -- (4,469)
1,822,389 Canadian Dollar ........ 1,809,721 12/12/08 -- (3,156)
110,900,000 Japanese Yen ........... 1,045,043 12/12/08 33,887 --
155,368,800 Kazakhstani Tenge ...... 1,200,000 12/12/08 57,318 --
105,200,000 Norwegian Krone ........ 18,535,812 12/22/08 1,679,163 --
3,250,000 Norwegian Krone ........ 623,310 12/31/08 717 --
2,700,000 Singapore Dollar ....... 1,976,863 12/31/08 31,912 --
178,636,250 Japanese Yen ........... 1,682,232 1/16/09 58,729 --
1,400,000 Canadian Dollar ........ 1,355,407 1/20/09 32,036 --
277,687,500 Japanese Yen ........... 2,664,001 1/20/09 42,838 --
10,146,672 Swiss Franc ............ 9,300,000 1/20/09 497,187 --
742,401,000 Japanese Yen ........... 7,114,392 1/22/09 123,100 --
6,800,000 Singapore Dollar ....... 4,817,570 1/22/09 245,388 --
7,000,000 Polish Zloty ........... 2,781,641 1/22/09 312,762 --
185,559,000 Japanese Yen ........... 1,777,811 1/28/09 31,734 --
135,564,000 Japanese Yen ........... 1,294,044 1/30/09 28,105 --
95,200,000 Japanese Yen ........... 911,965 2/04/09 16,775 --
774,539,750 Japanese Yen ........... 7,395,575 2/12/09 163,964 --
97,475,000 Japanese Yen ........... 925,425 2/17/09 26,201 --
845,000 Australian Dollar ...... 729,235 2/17/09 36,486 --
27,820,000 Swedish Krona .......... 4,245,708 2/17/09 330,694 --
56,140,000 Japanese Yen ........... 542,520 2/27/09 5,868 --
3,539,870 Swedish Krona .......... 564,798 2/27/09 17,263 --
5,000,000 Swiss Franc ............ 4,796,623 3/04/09 31,159 --
63,783,040 Swiss Franc ............ 64,000,000 4/02/09 -- (2,413,306)
6,285,440,000 Japanese Yen ........... 64,000,000 4/02/09 -- (2,485,270)
20,243,200 Malaysian Ringgit ...... 6,400,000 4/02/09 -- (11,098)
6,250,000 Singapore Dollar ....... 4,572,056 4/13/09 96,188 --
5,671,200 Malaysian Ringgit ...... 1,823,537 4/30/09 -- (33,840)
850,000 Singapore Dollar ....... 632,629 4/30/09 2,678 --
UNREALIZED GAIN (LOSS) ON OFFSETTING FORWARD EXCHANGE CONTRACTS ..... -- (109,467)
--------------------------
UNREALIZED GAIN (LOSS) ON FORWARD EXCHANGE CONTRACTS ................ 14,327,596 (5,062,951)
--------------------------
NET UNREALIZED GAIN (LOSS) ON FORWARD EXCHANGE CONTRACTS ......... $ 9,264,645
===========
26 | Semiannual Report
Franklin Templeton Global Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
7. NEW ACCOUNTING PRONOUNCEMENTS
The Fund adopted 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), on April 30, 2008. FIN 48
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. The Fund has reviewed the tax
positions as of October 31, 2007 and has determined that no provision for income
tax is required in the Fund's financial statements.
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.
In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The Fund is currently
evaluating the impact, if any, of applying the various provisions of SFAS 161.
Semiannual Report | 27
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT
At a meeting held February 25, 2008, 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
28 | 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. Among other
factors taken into account by the Board were the Manager's best execution
trading policies, including a favorable report by an independent portfolio
trading analytical firm. 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 predesignated 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 2007, as well as for the previous 10 years ended December 31, 2007, 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 2007 was in the 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 middle quintile for the
previous 10-year period. The Fund's total return during 2007 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 years was also
in the highest quintile of such universe, and during the previous 10-year period
was in the second-lowest quintile of such universe. The investment objective of
this Fund is to provide a hedge against the U.S. dollar and the
Semiannual Report | 29
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)
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. 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
30 | Semiannual Report
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)
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
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 and other regulatory 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. At December 31, 2007, the Fund had
net assets of approximately $445 million, and the Board accepted management's
position but intends to monitor future growth in Fund assets and the
appropriateness of adding investment management fee breakpoints.
Semiannual Report | 31
Franklin Templeton Global Trust
SHAREHOLDER INFORMATION (CONTINUED)
FRANKLIN TEMPLETON HARD CURRENCY FUND
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.
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.
32 | Semiannual Report
GOF P-8 00061400
SUPPLEMENT DATED JULY 1, 2008
TO THE CURRENTLY EFFECTIVE PROSPECTUS
OF EACH OF THE LISTED FUNDS
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FRANKLIN CALIFORNIA TAX-FREE TRUST
Franklin California Insured Tax-Free Income Fund
Franklin California Intermediate-Term Tax-Free Income Fund
Franklin California Limited-Term Tax-Free Income Fund
Franklin California Tax-Exempt Money Fund
FRANKLIN CAPITAL GROWTH FUND
FRANKLIN CUSTODIAN FUNDS
Franklin DynaTech Fund
Franklin Growth Fund
Franklin Income Fund
Franklin U.S. Government Securities Fund
Franklin Utilities Fund
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FRANKLIN GLOBAL TRUST
Fiduciary Large Capitalization Growth and Income Fund
Fiduciary Small Capitalization Equity Fund
Franklin Global Real Estate Fund
Franklin Templeton Core Fixed Income Fund
Franklin Templeton Core Plus Fixed Income Fund
Franklin Templeton Emerging Market Debt Opportunities Fund
Franklin International Small Cap Growth Fund
FRANKLIN GOLD AND PRECIOUS METALS FUND
FRANKLIN HIGH INCOME TRUST
Franklin High Income Fund
FRANKLIN INVESTORS SECURITIES TRUST
Franklin Adjustable U.S. Government Securities Fund
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Floating Rate Daily Access Fund
Franklin Limited Maturity U.S. Government Securities Fund
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Total Return Fund
FRANKLIN MANAGED TRUST
Franklin Rising Dividends Fund
FRANKLIN MONEY FUND
FRANKLIN MUNICIPAL SECURITIES TRUST
Franklin California High Yield Municipal Fund
Franklin Tennessee Municipal Bond Fund
FRANKLIN MUTUAL RECOVERY FUND
FRANKLIN MUTUAL SERIES FUNDS
Mutual Beacon Fund
Mutual Discovery Fund
Mutual European Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
FRANKLIN NEW YORK TAX-FREE INCOME FUND
FRANKLIN NEW YORK TAX-FREE TRUST
Franklin New York Insured Tax-Free Income Fund
Franklin New York Intermediate-Term Tax-Free Income Fund
Franklin New York Limited-Term Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund
FRANKLIN REAL ESTATE SECURITIES TRUST
Franklin Real Estate Securities Fund
FRANKLIN STRATEGIC MORTGAGE PORTFOLIO
FRANKLIN STRATEGIC SERIES
Franklin Biotechnology Discovery Fund
Franklin Flex Cap Growth Fund
Franklin Focused Core Equity Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Growth Opportunities Fund
Franklin Natural Resources Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund
Franklin Strategic Income Fund
Franklin Technology Fund
FRANKLIN TAX-EXEMPT MONEY FUND
FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Perspectives Allocation Fund
FRANKLIN TEMPLETON GLOBAL TRUST
Franklin Templeton Hard Currency Fund
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Franklin India Growth Fund
Templeton Foreign Smaller Companies Fund
Templeton Global Long-Short Fund
FRANKLIN TEMPLETON MONEY FUND TRUST
Franklin Templeton Money Fund
FRANKLIN VALUE INVESTORS TRUST
Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
INSTITUTIONAL FIDUCIARY TRUST
Franklin Cash Reserves Fund
Money Market Portfolio
TEMPLETON CHINA WORLD FUND
TEMPLETON DEVELOPING MARKETS TRUST
TEMPLETON FUNDS
Templeton Foreign Fund
Templeton World Fund
TEMPLETON GLOBAL INVESTMENT TRUST
Templeton BRIC Fund
Templeton Emerging Markets Small Cap Fund
Templeton Income Fund
TEMPLETON GLOBAL OPPORTUNITIES TRUST
TEMPLETON GLOBAL SMALLER COMPANIES FUND
TEMPLETON GROWTH FUND, INC.
TEMPLETON INCOME TRUST
Templeton Global Bond Fund
Templeton International Bond Fund
TEMPLETON INSTITUTIONAL FUNDS
Emerging Markets Series
Foreign Equity Series
Foreign Smaller Companies Series
Global Equity Series
The Prospectus is amended as follows:
I. Effective September 1, 2008, the redemption fee policy is discontinued.
Otherwise, the Funds' policies and procedures with respect to market timing
remain fully in effect.
II. Effective September 1, 2008, except as noted, for all funds that are offered
with an initial sales charge, the cumulative quantity discount and letter of
intent portion of the "Choosing a Share Class - Sales Charge Reductions and
Waivers" section, is amended to read:
1. CUMULATIVE QUANTITY DISCOUNT - lets you combine certain existing
holdings of Franklin Templeton fund shares - referred to as "cumulative
quantity discount eligible shares" - with your current purchase of Class A
shares to determine if you qualify for a sales charge breakpoint.
Not part of the semiannual report
Cumulative quantity discount eligible shares are Franklin Templeton Fund
shares registered to (or held by a financial intermediary for):
o You, individually;
o Your spouse or domestic partner, as recognized by applicable state
law, and your children under the age of 21 (each a "Family Member");
o You jointly with one or more Family Members;
o You jointly with another person(s) who is(are) not Family Members if
that other person has not included the value of the shares as
cumulative quantity discount eligible shares for purposes of that
person's separate investments in Franklin Templeton fund shares;
o A trustee/custodian of a Coverdell Education Savings account for
which you or a Family Member is the identified responsible person;
o A trustee/custodian of an IRA (which includes a Roth IRA and an
employer sponsored IRA such as a SIMPLE IRA) or your non-ERISA
covered 403(b), if the shares are registered/recorded under yours or
a Family Member's Social Security number;
o (Effective October 1, 2008.) A 529 college savings plan over which
you or a Family Member has investment discretion and control;
o Any entity over which you or a Family Member has (have) individual
or shared authority, as principal, has investment discretion and
control (for example, an UGMA/UTMA account for a child on which you
or a Family Member is the custodian, a trust on which you or a
Family Member is the trustee, a business account [not to include
retirement plans] for your solely owned business [or the solely
owned business of a Family Member] on which you or a Family Member
is the authorized signer);
o A trust established by you or a Family Member as grantor.
Franklin Templeton fund shares held through an administrator or
trustee/custodian of an Employer Sponsored Retirement plan such as a
401(k) plan (see definition below) do not qualify for a cumulative
quantity discount.
If you believe there are cumulative quantity discount eligible shares that
can be combined with your current purchase to achieve a sales charge
breakpoint (for example, shares held in a different broker-dealer's
brokerage account or with a bank or an investment advisor), it is your
responsibility to specifically identify those shares to your financial
adviser at the time of your purchase (including at the time of any future
purchase). If you have not designated a financial adviser associated with
your Franklin Templeton Fund shares, it is your responsibility to
specifically identify any cumulative quantity discount eligible shares to
the Fund's transfer agent at the time of any purchase.
If there are cumulative quantity discount eligible shares that would
qualify for combining with your current purchase and you do not tell your
financial adviser or the Franklin Templeton Funds' transfer agent at the
time of any purchase, you may not receive the benefit of a reduced sales
charge that might otherwise be available since your financial adviser and
the Fund generally will not have that information.
The value of cumulative quantity discount eligible shares equals the cost
or current value of those shares, whichever is higher. The current value
of shares is determined by multiplying the number of shares by their
highest current public offering price. It is your responsibility to retain
any records necessary to substantiate historical share costs because
neither your current financial adviser nor the Franklin Templeton Funds
may have or maintain this information.
An "Employer Sponsored Retirement Plan" is a Qualified Retirement Plan,
ERISA covered 403(b) and certain non-qualified deferred compensation
arrangements that operate in a similar manner to a Qualified Retirement
Plan, such as 457 plans and executive deferred compensation arrangements,
but not including employer sponsored IRAs. A "Qualified Retirement Plan"
is an employer sponsored pension or profit sharing plan that qualifies
under section 401(a) of the Internal Revenue Code, including 401(k), money
purchase pension, profit sharing and defined benefit plans.
2. LETTER OF INTENT (LOI) - expresses your intent to buy a stated dollar
amount of "cumulative quantity discount eligible shares" (as defined in
the "Cumulative Quantity Discount" section above) over a 13-month period
and lets you receive the same sales charge as if all shares had been
purchased at one time. We will reserve 5% of your total intended purchase
in Class A shares registered in your name until you fulfill your LOI to
cover any additional sales charge that may apply if you do not buy the
amount stated in your LOI. It is your responsibility to tell your
financial adviser when you believe you have fulfilled your LOI with
sufficient cumulative quantity discount eligible shares. If you have not
designated a financial adviser associated with your Franklin Templeton
Fund shares, it is your responsibility to tell the Funds' transfer agent
when you believe you have fulfilled your LOI with sufficient cumulative
quantity discount eligible shares. Please refer to the Statement of
Additional Information for more LOI details.
Not part of the semiannual report
To sign up for these programs, complete the appropriate section of your
account application.
III. Effective September 1, 2008, the second sentence of the section "Choosing a
Share Class - Investments of $1 Million or More" is amended as follows:
However, there is a 1% Contingent Deferred Sales Charge (CDSC) for funds
that have a maximum initial sales charge of 5.75%; for all other funds,
the maximum CDSC will be 0.75%. The CDSC is assessed on any shares you
redeem within 18 months of purchase.
IV. For all funds that offer Advisor Class or Class Z Shares, the "Choosing a
Share Class - Qualified Investors - Advisor Class" (and "Qualified Investors -
Class Z" for Mutual Series funds) section is revised to include the following
category of investor:
o Unaffiliated U.S. registered mutual funds, including those that
operate as "fund of funds." Minimum initial investment: $1 million
in Advisor Class or Class Z shares of any Franklin Templeton fund.
V. For TEMPLETON INCOME FUND, TEMPLETON GLOBAL BOND FUND AND TEMPLETON
INTERNATIONAL BOND FUND:
1. The section "Goal and Strategies - Main Investment Strategies" is revised to
include the following:
FOREIGN CURRENCY TRANSACTIONS For the purposes of hedging currency
exchange rates, efficient portfolio management and/or enhancement of
returns, the Fund may also, from time to time, enter into forward
contracts including currency forwards, cross currency forwards (which may
result in net short currency exposures), options on currencies or
financial and index futures contracts, including interest rate swaps. Such
transactions could be effected with respect to hedges on non-U.S. dollar
denominated securities owned by the Fund or sold by the Fund but not yet
delivered, or committed or anticipated to be purchased by the Fund. The
successful use of these transactions will usually depend on the manager's
ability to accurately forecast currency exchange rate movements. Should
exchange rates move in an unexpected manner, the Fund may not achieve the
anticipated benefits of the transaction, or it may realize losses. In
addition, these techniques could result in a loss if the counterparty to
the transaction does not perform as promised. Moreover, investors should
bear in mind that the Fund is not obligated to actively engage in these
transactions.
2. The board of trustees of the Funds has approved the removal of the Funds'
previous policy of limiting investments in derivative securities to 5% of the
Funds' assets.
VI. For TEMPLETON EMERGING MARKETS SMALL CAP FUND:
1. The third paragraph of the section "Goal and Strategies - Main Investment
Strategies" on page 2 is revised to read as follows:
For purposes of the Fund's investments, emerging market small cap
companies are those having a market capitalization at the time of initial
purchase within the range of the market capitalizations of companies
included in the Morgan Stanley Capital International All Country World
Small Cap Index and:
o whose principal securities trading markets are in emerging market
countries; or
o that derive at least 50% of their total revenues or profits from
either goods or services produced or sales made in emerging market
countries; or
o that have at least 50% of their assets in emerging market countries;
or
o that are linked to currencies of emerging market countries; or
o that are organized under the laws of, or with principal offices in,
emerging market countries.
2. The section "Main Risks - Diversification" on page 6 is revised to delete the
last sentence.
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE.
Not part of the semiannual report
This page intentionally left blank.
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
Franklin India Growth Fund
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 Capital Growth Fund
Franklin Flex Cap Growth
Fund Franklin Growth Opportunities Fund 2
Franklin Small Cap Growth Fund 3
Franklin Small-Mid Cap Growth Fund
VALUE
Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
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 4
Mutual Shares Fund
BLEND
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Focused Core Equity 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 5
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund
Franklin Income Fund
Franklin Limited Maturity U.S. Government Securities Fund 5
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 5
Templeton Global Bond Fund
Templeton Income Fund
Templeton International Bond 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
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 closed to new investors. Existing shareholders and select
retirement plans can continue adding to their accounts.
2. Effective 11/1/07, Franklin Aggressive Growth Fund changed its name to
Franklin Growth Opportunities Fund. The fund's investment goal and strategy
remained the same.
3. Effective 3/31/08, Franklin Small Cap Growth Fund II changed its name to
Franklin Small Cap Growth Fund. The fund's investment goal and strategy remained
the same.
4. 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.
5. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
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.
04/08 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?
Eligible shareholders can sign up for eDelivery at franklintempleton.com.
See inside for details.
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 S2008 06/08
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 Galen G. Vetter, Chief Executive Officer - Finance and Administration, and
Laura F. Fergerson, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Galen G. Vetter, Chief Executive Officer - Finance and Administration, and Laura
F. Fergerson, Chief Financial Officer and Chief Accounting 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/GALEN G. VETTER
------------------
Galen G. Vetter
Chief Executive Officer - Finance and Administration
Date June 26, 2008
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/GALEN G. VETTER
-------------------
Galen G. Vetter
Chief Executive Officer - Finance and Administration
Date June 26, 2008
By /S/LAURA F. FERGERSON
---------------------
Laura F. Fergerson
Chief Financial Officer and Chief Accounting Officer
Date June 26, 2008