UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-5878
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FRANKLIN VALUE INVESTORS TRUST
------------------------------
(Exact name of registrant as specified in charter)

ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
-----------------------------------------------------------------
(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
------

Date of reporting period: 4/30/03
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ITEM 1. REPORTS TO STOCKHOLDERS.

SEMIANNUAL REPORT

FRANKLIN BALANCE SHEET
INVESTMENT FUND

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YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: FRANKLIN BALANCE SHEET INVESTMENT FUND
SEEKS HIGH TOTAL RETURN, OF WHICH CAPITAL APPRECIATION AND INCOME ARE
COMPONENTS, BY INVESTING PRIMARILY IN SECURITIES THAT WE BELIEVE ARE UNDERVALUED
IN THE MARKETPLACE.
- --------------------------------------------------------------------------------

This semiannual report for Franklin Balance Sheet Investment Fund covers the
period ended April 30, 2003. The Fund's Class A shares' cumulative total return
was +2.38% for the six months ended April 30, 2003, as shown in the Performance
Summary beginning on page 9. Our results were behind those of the benchmark
Russell 2000(R) Value Index, which returned 7.44% for the same period. 1

On April 30, 2003, the Fund still held 30.1% of total net assets in short-term
investments and other net assets (cash) a year after closing to new investors.
This is a source of some frustration to us. As of May 31, 2003, cash was down to
approximately 27% of total net assets. We always prefer to be fully invested so
long as we stay within our investment discipline. Since our total return for the
reporting period was fairly close to the net yield on cash, being underinvested
has not yet detracted seriously from Fund performance relative to our stock
picking. A bigger question is whether stretching our investment criteria to be
fully invested

1. Source: Standard & Poor's Micropal. The Russell 2000 Value Index is market
capitalization-weighted and measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth values.
The index is unmanaged and includes reinvested dividends. One cannot invest
directly in an index, nor is an index representative of the Fund's portfolio.

The dollar value, number of shares or principal amount, and complete legal
titles of all portfolio holdings are listed in the Fund's Statement of
Investments (SOI). The SOI begins on page 34.

4 SEMIANNUAL REPORT

in the period under review would improve or hinder our performance in future
periods.

Our discipline is to buy financially sound, well-established companies at a low
price-to-book value, where we have reasonable confidence that book value will
increase over several years. Book value per share is a given company's net worth
or shareholder's equity on an accounting or "book" basis, divided by the shares
outstanding. We define "low price-to-book value" as the lower two deciles (20%)
of our investable universe, which we derive from the FactSet proprietary
database for screening purposes. After eliminating companies that are too small
for the Fund or are otherwise obviously unsuitable, we are left with
approximately 2,000 companies to screen. On April 30, 2003, the price-to-book
cutoff for the lowest two deciles was 1.3 times book value under this
methodology.

Book value is an accounting construct, subject to numerous estimations and
conventions woven into generally accepted accounting principles, or GAAP. We do
not accept GAAP book value unexamined. Our analysis of a prospective company's
balance sheet is the first step in sizing it up. Unless we can develop
confidence in the numbers as stated or conservatively adjusted, we are not
inclined to pursue it. If we do proceed, the next step is to analyze the company
in the context of its industry to assess the likelihood of book value growth
over the coming years. Book value grows through the accumulation of earnings and
sound deployment of capital.

Our assessment includes considerations of corporate governance. We give the
proxy statement careful scrutiny for signs of self-dealing, entrenchment or
excessive compensation. This is largely a subjective process, although standard
guidelines are available regarding board independence. We believe, based on
experience, that if our investment goals are at cross-purposes with a
self-interested management's agenda, we are far less likely to achieve our
investment objectives than if management is working with us.

PORTFOLIO BREAKDOWN
Franklin Balance Sheet Investment Fund
Based on Total Net Assets
4/30/03
[BAR CHART OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

Retail Trade 7.5%
Transportation 6.7%
Consumer Durables 6.2%
Property-Casualty Insurance 6.2%
Producer Manufacturing 4.9%
Utilities 4.7%
Life & Health Insurance 4.6%
Process Industries 4.1%
Non-Energy Minerals 3.3%
Financial Conglomerates 3.1%
Specialty Insurance 2.9%
Electronic Technology 2.4%
Consumer Non-Durables 2.2%
Consumer Services 1.9%
Finance, Rental & Leasing 1.6%
Energy Minerals 1.6%
Other 6.0%
Short-Term Investments & Other Net Assets 30.1%

SEMIANNUAL REPORT 5

[SIDEBAR]
WHAT ARE PRO FORMA RESULTS?

PRO FORMA RESULTS REFER TO A COMPANY'S PRESENTATION OF DATA, SUCH AS A BALANCE
SHEET OR INCOME STATEMENT, WHERE CERTAIN AMOUNTS ARE HYPOTHETICAL. FOR EXAMPLE,
A PRO FORMA BALANCE SHEET MIGHT SHOW A DEBT ISSUE THAT HAS BEEN PROPOSED BUT HAS
NOT YET BEEN CONSUMMATED.

In reading the prospective company's financial material or in conversations with
them, we greatly prefer a conservative bias toward protecting the franchise over
an eagerness to follow Wall Street's agenda. We want to avoid managements that
seem to be focused on the stock price first and the business's long-term health
second. These judgments cannot be reduced to numerical comparisons.

We think that our lower two-decile universe has yielded up a smaller percentage
of attractive new investment opportunities during the past several quarters,
even though stock prices, as reflected by the broad market indexes, are down
from historical highs. Two contributing factors are the record number of
companies issuing earnings restatements, and the proliferation of "special
charges." Restatements are essentially management's admission that they
themselves lack confidence in their own prior financial reporting. Price drops
that follow restatements will often put companies in our lower two deciles
without making them attractive for our Fund. Similarly, 2001-2002 saw many
companies in diverse industries taking material charges related to assets
acquired as a result of mergers and acquisitions in prior periods. No doubt some
of these companies represent good potential investments. However, we think many
will turn out to be serial restructurers, chronically serving up special items
and pro forma results that do not add up to book value growth. Our sense is that
such companies represent a bigger part of our two deciles today than in the
past.

Net cash flow for the six months under review was $60.2 million (excluding
reinvestment). We are pleased that a year after closing the Fund our cash flows
are modestly positive, which we think is optimal for existing shareholders as we
gradually deployed the cash that built up prior to the Fund's closing to new
investors. We initiated positions in Airborne, Intergraph, Kellwood, Universal,
Mueller Industries, OfficeMax, Xcel Energy and First Niagara Financial. We were
fortunate that the single largest new commitment of funds was to Airborne ($27.1
million), which announced

6 SEMIANNUAL REPORT

a deal whereby shareholders will receive $21.25 per share from Deutsche Poste AG
for the ground delivery operation. Under terms of the deal, shareholders will
continue to own the air transport business, which will operate under contract
with Deutsche Post's DHL unit. Our average cost was $14.87 per share. Our next
two largest commitments during the period were Intergraph, an enterprise
solutions provider with valuable technology patents; and Xcel Energy, a large
regulated electric utility that is working its way out of unsuccessful merchant
energy ventures. We also added to several existing holdings, most substantially
to Nucor (steel) and Old Republic (insurance).

Takeover activity has been sparse compared to most of the Fund's history, and
not always gratifying. Shortly after the Airborne announcement, Clayton Homes
signed a deal to be bought by Warren Buffett's Berkshire Hathaway for $12.50 per
share, a price that was below our average cost. This was particularly
disappointing because Clayton, which builds, distributes, finances and insures
manufactured homes, is a classic "balance sheet" company, with what we believe
to be fine management and an excellent record of book value growth. In Buffett's
own words, "Clayton Homes is far and away the premier company in the
manufactured housing industry, with high-quality products and outstanding
leadership and personnel. By retaining discipline, Clayton Homes is the lone
tower of strength in an industry battered in recent years by the consequences of
lax financing practices." 2 Our expectations were far higher than $12.50 per
share, which was about 1.3 times Clayton's conservatively stated book value. The
deal seems to have been precipitated by management's concern that the industry's
problems would eventually compromise even Clayton's access to capital. 3
Berkshire Hathaway, with its AAA credit rating, is not likely to be concerned
with funding Clayton's installment sales.

TOP 10 EQUITY HOLDINGS
Franklin Balance Sheet
Investment Fund
4/30/03

COMPANY % OF TOTAL
SECTOR/INDUSTRY NET ASSETS
- ------------------------------

American National
Insurance Co. 1.9%
LIFE & HEALTH INSURANCE

Old Republic
International Corp. 1.9%
PROPERTY-CASUALTY INSURANCE

Bunge Ltd. 1.7%
PROCESS INDUSTRIES

Clayton Homes Inc. 1.7%
CONSUMER DURABLES

CIT Group Inc. 1.6%
FINANCE, RENTAL & LEASING

Aztar Corp. 1.6%
CONSUMER SERVICES

Peabody Energy Corp. 1.6%
ENERGY MINERALS

IPC Holdings Ltd.
(Bermuda) 1.5%
PROPERTY-CASUALTY INSURANCE

Pulte Homes Inc. 1.4%
CONSUMER DURABLES

Entergy Corp. 1.4%
UTILITIES

2. Source: Business Wire, "Clayton Homes, Inc. to be Acquired by Berkshire
Hathaway," 4/1/03.

3. Note: This statement is based on the Clayton Homes proxy form PREM14A, filed
with the SEC on 4/18/03, under the section titled "Reasons for the Merger."

SEMIANNUAL REPORT 7

We also eliminated several positions from the portfolio: AGCO, American
International Group, Arch Capital, Kaneb Services, LandAmerica Financial Group,
Nash Finch, Stolt-Nielsen, UnumProvident, and Vesta Insurance. The first five
were successful investments, generally typical of what we try to achieve under
our investment strategy. The remaining four were losers whose sales followed our
loss of confidence in the integrity of the companies' financial reporting or
business conduct.

Our goal for the remainder of the Fund's fiscal year is to work down our cash
position without compromising our investment discipline. We remain confident
that careful, patient adherence to our balance sheet strategy will prove
rewarding over time.

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This discussion reflects our analysis, opinions and portfolio holdings as of
April 30, 2003, the end of the reporting period. Our strategies and the Fund's
portfolio composition will change depending on 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 advisor 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.
- --------------------------------------------------------------------------------

8 SEMIANNUAL REPORT

FRANKLIN BALANCE SHEET INVESTMENT FUND

PERFORMANCE SUMMARY AS OF 4/30/03

YOUR DIVIDEND INCOME WILL VARY DEPENDING ON THE DIVIDENDS OR INTEREST PAID BY
THE SECURITIES IN THE FUND'S PORTFOLIO, ADJUSTED FOR THE OPERATING EXPENSES OF
EACH CLASS. CAPITAL GAIN DISTRIBUTIONS ARE NET PROFITS REALIZED FROM THE SALE OF
PORTFOLIO SECURITIES. THE PERFORMANCE TABLE AND GRAPHS DO NOT REFLECT ANY TAXES
DUE ON FUND DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, IF ANY, OR ANY REALIZED GAINS
ON THE SALE OF FUND SHARES. TOTAL RETURN REFLECTS THE FUND'S DIVIDEND INCOME,
CAPITAL GAIN DISTRIBUTIONS, IF ANY, AND ANY UNREALIZED GAINS OR LOSSES.

PRICE AND DISTRIBUTION INFORMATION

CLASS A CHANGE 4/30/03 10/31/02
- ----------------------------------------------------------------
Net Asset Value (NAV) +$0.38 $37.39 $37.01

DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.2480
Short-Term Capital Gain $0.0846
Long-Term Capital Gain $0.1658
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Total $0.4984

CLASS B CHANGE 4/30/03 10/31/02
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Net Asset Value (NAV) +$0.48 $37.12 $36.64

DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.0051
Short-Term Capital Gain $0.0846
Long-Term Capital Gain $0.1658
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Total $0.2555

CLASS C CHANGE 4/30/03 10/31/02
- ----------------------------------------------------------------
Net Asset Value (NAV) +$0.49 $37.16 $36.67

DISTRIBUTIONS (11/1/02-4/30/03)
Short-Term Capital Gain $0.0846
Long-Term Capital Gain $0.1658
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Total $0.2504

CLASS R CHANGE 4/30/03 10/31/02
- ----------------------------------------------------------------
Net Asset Value (NAV) +$0.38 $37.30 $36.92

DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.2204
Short-Term Capital Gain $0.0846
Long-Term Capital Gain $0.1658
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Total $0.4708

ADVISOR CLASS CHANGE 4/30/03 10/31/02
- ----------------------------------------------------------------
Net Asset Value (NAV) +$0.34 $37.40 $37.06

DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.3283
Short-Term Capital Gain $0.0846
Long-Term Capital Gain $0.1658
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Total $0.5787

- --------------------------------------------------------------------------------
CLASS A: Subject to the current, maximum 5.75% initial sales charge. Prior to
1/2/01, Fund shares were offered at a lower initial sales charge; thus actual
total returns may differ.

CLASS B: Subject to no initial sales charge, but subject to a contingent
deferred sales charge (CDSC) declining from 4% to 0% over six years. These
shares have higher annual fees and expenses than Class A shares.

CLASS C: Subject to 1% initial sales charge and 1% CDSC for shares redeemed
within 18 months of investment. These shares have higher annual fees and
expenses than Class A shares.

CLASS R: No initial sales charge, but subject to 1% CDSC for shares redeemed
within 18 months of investment; are available to certain eligible investors as
described in the prospectus. These shares have higher annual fees and expenses
than Class A shares.

ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees and are available to a
limited class of investors.
- --------------------------------------------------------------------------------

Past performance does not guarantee future results.

SEMIANNUAL REPORT 9

PERFORMANCE SUMMARY (CONT.)

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes any current, applicable,
maximum sales charge(s). 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 and include any current, applicable, maximum
sales charge(s).

4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

5. Effective 3/1/01, the Fund began offering Advisor Class shares, which do not
have sales charges or a Rule 12b-1 plan. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 3/1/01, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge, but reflecting the effect of
the Class A Rule 12b-1 fees; and (b) for periods after 2/28/01, actual Advisor
Class performance is used reflecting all charges and fees applicable to that
class. Since 3/1/01 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were +7.32% and +3.32%.

PERFORMANCE

CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- -----------------------------------------------------------------------
Cumulative Total Return 1 +2.38% -12.08% +18.26% +204.29%
Average Annual Total Return 2 -3.51% -17.14% +2.19% +11.11%
Value of $10,000 Investment 3 $9,649 $8,286 $11,146 $28,681
Avg. Ann. Total Return (3/31/03) 4 -20.72% +1.28% +10.44%

INCEPTION
CLASS B 6-MONTH 1-YEAR (3/1/01)
- -----------------------------------------------------------------------
Cumulative Total Return 1 +2.01% -12.73% +5.08%
Average Annual Total Return 2 -1.99% -16.20% +0.96%
Value of $10,000 Investment 3 $9,801 $8,380 $10,209
Avg. Ann. Total Return (3/31/03) 4 -19.85% -1.76%

INCEPTION
CLASS C 6-MONTH 1-YEAR (3/1/01)
- -----------------------------------------------------------------------
Cumulative Total Return 1 +2.02% -12.73% +5.15%
Average Annual Total Return 2 +0.01% -14.46% +1.87%
Value of $10,000 Investment 3 $10,001 $8,554 $10,408
Avg. Ann. Total Return (3/31/03) 4 -18.17% -0.84%

INCEPTION
CLASS R 6-MONTH 1-YEAR (1/1/02)
- -----------------------------------------------------------------------
Cumulative Total Return 1 +2.31% -12.30% -5.39%
Average Annual Total Return 2 +1.31% -13.16% -4.82%
Value of $10,000 Investment 3 $10,131 $8,684 $9,368
Avg. Ann. Total Return (3/31/03) 4 -16.93% -9.45%

ADVISOR CLASS 5 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- -----------------------------------------------------------------------
Cumulative Total Return 1 +2.49% -11.89% +18.82% +205.74%
Average Annual Total Return 2 +2.49% -11.89% +3.51% +11.82%
Value of $10,000 Investment 3 $10,249 $8,811 $11,882 $30,574
Avg. Ann. Total Return (3/31/03) 4 -15.71% +2.58% +11.14%

- --------------------------------------------------------------------------------
Ongoing market volatility can significantly affect short-term performance; more
recent returns may differ from those shown. Investment return and principal
value will fluctuate with market conditions, and you may have a gain or loss
when you sell your shares. The Fund's ability to invest in small, relatively new
companies involves additional risks such as small revenues, limited product
lines and small market share. Historically, these securities have exhibited
greater price volatility than larger-company stocks, especially over the short
term. These and other risks are described more fully in the Fund's prospectus.
- --------------------------------------------------------------------------------

For more current performance, see "Funds and Performance" at
franklintempleton.com or call 1-800/342-5236.

Past performance does not guarantee future results.

10 SEMIANNUAL REPORT

FRANKLIN LARGE CAP VALUE FUND

- --------------------------------------------------------------------------------
YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: FRANKLIN LARGE CAP VALUE FUND SEEKS
LONG-TERM CAPITAL APPRECIATION BY INVESTING AT LEAST 80% OF NET ASSETS IN
SECURITIES OF LARGE CAPITALIZATION COMPANIES THAT WE BELIEVE ARE UNDERVALUED.
LARGE CAPITALIZATION COMPANIES ARE THOSE THAT ARE SIMILAR IN SIZE TO THOSE IN
THE RUSSELL 1000(R) INDEX AT THE TIME OF PURCHASE.1
- --------------------------------------------------------------------------------

We are pleased to bring you Franklin Large Cap Value Fund's semiannual report
for the period ended April 30, 2003. During the six months under review, equity
markets fell on broad economic concerns, exacerbated by investors' fears that a
protracted war in Iraq might also unsettle the economy. However, a market rally
commenced toward the close of the reporting period when it became apparent that
the war would be fairly short and would not jeopardize a U.S. economic recovery.
Historically low interest rates also continued to aid equity markets by making
bonds and cash a less attractive alternative to stocks.

Within this environment, Franklin Large Cap Value Fund - Class A produced a
+3.81% cumulative total return for the six months ended April 30, 2003, as shown
in the Performance Summary beginning on page 15. In comparison, the Fund's
benchmark, the Russell 1000 Value Index, rose 5.25% for the

1. The Russell 1000 Index is market capitalization-weighted and measures the
performance of the 1,000 largest companies in the Russell 3000(R) Index, which
represent approximately 92% of the total market capitalization of the Russell
3000 Index.

The dollar value, number of shares or principal amount, and complete legal
titles of all portfolio holdings are listed in the Fund's Statement of
Investments (SOI). The SOI begins on page 43.

SEMIANNUAL REPORT 11

same period. 2 Although the technology-laden Nasdaq Composite Index returned an
unusually strong 10.53% over the reporting period, we maintained a cautious
outlook for most large-cap technology stocks due to the potentially diluting
impact of stock options that we believed may not have been fully reflected in
many technology-related stocks' share prices. 3

Among our strongly performing stocks during the six-month period were brokerage
companies Morgan Stanley Dean Witter and Lehman Brothers. While merger and
acquisition and equity underwriting businesses remained weak, stronger results
in fixed income underwriting and trading stabilized results. Another financial
stock that performed well for the Fund was life insurer MetLife, due in part to
what we believe was its very attractive valuation early in the reporting period.

Cendant Corporation was another strong performer, perhaps due to the company's
efforts to improve corporate governance and provide increased financial clarity.
In addition, management's decision to curtail acquisitions was seen as a
positive step. In our opinion, Cendant's well-established cash generating
businesses could provide further gains, given its modest stock valuation at
period-end.

While several of our financial services companies advanced during the six months
under review, one notable exception was insurer American International Group
(AIG). The company had to take a charge-off for inadequate underwriting
reserves, which somewhat tarnished its superb reputation as an underwriter.
While

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

Portfolio Breakdown
Franklin Large Cap Value Fund
Based on Total Net Assets
4/30/03

Energy Minerals 7.7%
Major Banks 7.1%
Consumer Services 6.7%
Property-Casualty Insurance 5.8%
Retail Trade 5.5%
Health Technology 5.4%
Producer Manufacturing 4.8%
Financial Conglomerates 4.3%
Consumer Non-Durables 4.2%
Investment Banks & Brokers 4.2%
Finance, Rental & Leasing 4.0%
Communications 4.0%
Industrial Services 3.3%
Process Industries 2.8%
Life & Health Insurance 2.8%
Transportation 2.4%
Other 13.4%
Short-Term Investments & Other Net Assets 11.6%

2. Source: Standard & Poor's Micropal. The Russell 1000 Value Index is market
capitalization-weighted and measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.

3. Source: Standard & Poor's Micropal. The Nasdaq Composite Index measures all
domestic and international common stocks listed on the Nasdaq Stock Market. The
index is market value-weighted and includes over 4,000 companies.

The indexes are unmanaged and include reinvested dividends. One cannot invest
directly in an index, nor is an index representative of the Fund's portfolio.

12 SEMIANNUAL REPORT

the charge-off was disappointing, we believe it was modest relative to AIG's
huge shareholder equity.

Other disappointments were telecommunications giant SBC Communications and
grocery store chain Safeway. SBC's earnings performance continued to be hurt by
an intensely competitive environment along with rising pension costs. SBC shares
were also affected by new Federal Communications Commission regulations that
were not as favorable as many had hoped. Safeway's earnings were negatively
impacted by increased competition and operating costs. Although these companies
disappointed us in the short term, we continue to hold them given what we
consider their recently depressed stock valuations.

Two positions initiated during the reporting period were pharmaceutical giant
Pfizer and personal paper products manufacturer Kimberly Clark. We found the
stocks of many major pharmaceutical companies not faring well recently, due to
looming patent expirations and a lack of new blockbuster drugs in the product
pipelines. Pfizer's valuation seemed attractive as the company does not face any
major patent expirations until 2006, by which time we believe its new product
pipeline could compensate for the lost sales. Also, Pfizer's recently completed
merger with Pharmacia broadened the company's product line, and we believe
offers the opportunity to realize synergies, including lower costs. We began to
accumulate attractively valued shares of Kimberly Clark as its stock price
retreated during the reporting period, in part due to competition in the diaper
niche. We think Kimberly Clark, with its good long-term growth record and
several attractive brand name products, should perform better over time.

We sold our Bristol-Myers Squibb holdings based on our assessment of the
company's uncertain growth prospects and future patent expiration risk. We also
eliminated our position in Clear Channel Communications on our belief that the
stock had become fully valued.

TOP 10 EQUITY HOLDINGS
Franklin Large Cap Value Fund
4/30/03

COMPANY % OF TOTAL
SECTOR/INDUSTRY NET ASSETS
- ------------------------------

Cendant Corp. 3.4%
CONSUMER SERVICES

McDonald's Corp. 3.3%
CONSUMER SERVICES

Citigroup Inc. 3.2%
FINANCIAL CONGLOMERATES

Federated Department
Stores Inc. 3.0%
RETAIL TRADE

Mellon Financial Corp. 3.0%
MAJOR BANKS

Marathon Oil Corp. 3.0%
ENERGY MINERALS

Allstate Corp. 2.9%
PROPERTY-CASUALTY INSURANCE

Anadarko Petroleum Corp. 2.9%
ENERGY MINERALS
Pfizer Inc. 2.9%
HEALTH TECHNOLOGY

International Paper Co. 2.8%
PROCESS INDUSTRIES

SEMIANNUAL REPORT 13

We are pleased to have posted positive results for this reporting period, but
remain convinced that recent market conditions for large-cap value stocks
continue to present challenges. Regardless of the market environment, we believe
that our disciplined approach to buying fundamentally sound companies when they
are out of favor should provide rewarding long-term results for our
shareholders.

14 SEMIANNUAL REPORT

FRANKLIN LARGE CAP
VALUE FUND

PERFORMANCE SUMMARY AS OF 4/30/03

PRICE AND DISTRIBUTION INFORMATION

CLASS A CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.33 $10.81 $10.48
DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.0676

CLASS B CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.36 $10.75 $10.39
DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.0054

CLASS C CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.35 $10.74 $10.39
DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.0142

CLASS R CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.30 $10.78 $10.48
DISTRIBUTIONS (11/1/02-4/30/03)
Dividend Income $0.0918

- --------------------------------------------------------------------------------
CLASS A: Subject to the maximum 5.75% initial sales charge.*

CLASS C: Subject to 1% initial sales charge and 1% CDSC for shares redeemed
within 18 months of investment. These shares have higher annual fees and
expenses than Class A shares.*

*The Fund's manager has agreed in advance to waive a portion of its management
fees and to make certain payments to reduce expenses. If the manager had not
taken this action, the Fund's total return would have been lower. The fee waiver
may be discontinued at any time, upon notice to the Fund's Board of Trustees.
- --------------------------------------------------------------------------------

Past performance does not guarantee future results.

SEMIANNUAL REPORT 15

PERFORMANCE SUMMARY (CONT.)

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes any applicable, maximum
sales charge(s). 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 and include any applicable, maximum sales
charge(s).

4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

5. Aggregate total return represents the change in value of an investment since
inception and includes the maximum sales charge. Since Class R shares have
existed for less than one year, average annual total returns are not provided.

PERFORMANCE

INCEPTION
CLASS A 6-MONTH 1-YEAR (6/1/00)
- ------------------------------------------------------------------

Cumulative Total Return 1 +3.81% -13.04% +11.18%
Average Annual Total Return 2 -2.17% -18.02% +1.62%
Value of $10,000 Investment 3 $9,783 $8,198 $10,479
Avg. Ann. Total Return (3/31/03) 4 -24.54% -0.74%

INCEPTION
CLASS B 6-MONTH 1-YEAR (6/1/00)
- ------------------------------------------------------------------

Cumulative Total Return 1 +3.52% -13.47% +9.30%
Average Annual Total Return 2 -0.48% -16.93% +2.12%
Value of $10,000 Investment 3 $9,952 $8,307 $10,630
Avg. Ann. Total Return (3/31/03) 4 -23.57% -0.29%

INCEPTION
CLASS C 6-MONTH 1-YEAR (6/1/00)
- ------------------------------------------------------------------

Cumulative Total Return 1 +3.51% -13.55% +9.27%
Average Annual Total Return 2 +1.53% -15.30% +2.74%
Value of $10,000 Investment 3 $10,153 $8,470 $10,819
Avg. Ann. Total Return (3/31/03) 4 -21.92% +0.43%

INCEPTION
CLASS R 6-MONTH (8/1/02)
- ------------------------------------------------------------------

Cumulative Total Return 1 +3.76% +3.07%
Aggregate Total Return 5 +2.76% +2.07%
Value of $10,000 Investment 3 $10,276 $10,207
Aggregate Total Return (3/31/03) 4, 5 -4.58%

For more current performance, see "Funds and Performance" at
franklintempleton.com or call 1-800/342-5236.

Past performance does not guarantee future results.

16 SEMIANNUAL REPORT

FRANKLIN MICROCAP VALUE FUND

- --------------------------------------------------------------------------------
YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: FRANKLIN MICROCAP VALUE FUND SEEKS
HIGH TOTAL RETURN BY INVESTING AT LEAST 80% OF NET ASSETS IN SECURITIES OF
COMPANIES WITH MARKET CAPITALIZATIONS UNDER $300 MILLION AT THE TIME OF
PURCHASE, AND WHICH WE BELIEVE ARE UNDERVALUED IN THE MARKETPLACE.
- --------------------------------------------------------------------------------

We are pleased to bring you Franklin MicroCap Value Fund's semiannual report for
the period ended April 30, 2003. The Fund's Class A shares' cumulative total
return was +3.25% for the six months ended April 30, 2003, as shown in the
Performance Summary on page 22. By comparison, the benchmark Russell 2000 Value
Index posted a 7.44% return during the same time. 1 We look at the index only
when we prepare our reports for shareholders. Otherwise we pay no attention to
its weightings, rebalancings or performance. The goal of our investment strategy
is to earn better than average returns over time at less than average risk, and
we assume our returns will vary from the benchmark in most measurement periods.

The dollar value, number of shares or principal amount, and complete legal
titles of all portfolio holdings are listed in the Fund's Statement of
Investments (SOI). The SOI begins on page 46.

SEMIANNUAL REPORT 17

Fund cash flow was -$28.2 million (excluding reinvestment) in the six-month
period, an improvement over the $63 million in net redemptions over the
preceding four months, but still problematic. Rapid swings in cash flow are
burdensome in the less liquid world of micro-cap stocks, where we can spend
months accumulating or selling off a given holding.

Near period-end we saw attractive investment opportunities and would have
welcomed positive cash flow. For that reason, our Board of Trustees opened the
Fund to select retirement accounts, such as certain 401(k) plans. It may take
several months to generate meaningful inflows from that channel, but we believe
the approach will be beneficial to our existing shareholders since such funds
tend to be stable and long-term in nature.

Takeover activity remained below levels of past years, with only one announced
takeover within the portfolio. On March 3, Zemex announced it would be bought by
Cementos Pacasmayo, a Peruvian cement maker, for $8.80 per share, which was a
45.7% premium to the prior day's closing price. Our realized gain on the deal
was not stellar, only 17.1%. We anticipate that a stronger economic recovery and
freer bank lending will stimulate takeover activity in the sorts of stocks we
hold.

We added selectively to some of our existing positions and established four new
ones: Northwest Pipe, a maker of welded steel pipe; Powell Industries, a
manufacturer of electrical energy and process control systems; RTI
International, a producer of titanium products; and Safety Insurance Group, a
Massachusetts property and casualty insurer.

Proceeds from security sales totaled $30.4 million. In all, we reduced or
eliminated 43 positions. Among those eliminated were Casual Male Retail Group,
Flanders, Qualstar, Steel Technologies, Vesta Insurance and Zemex.

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

Portfolio Breakdown
Franklin MicroCap Value Fund
Based on Total Net Assets
4/30/03

Producer Manufacturing 16.1%
Consumer Non-Durables 14.5%
Transportation 8.7%
Property-Casualty Insurance 7.6%
Industrial Services 6.8%
Retail Trade 6.8%
Savings Banks 5.9%
Consumer Durables 5.0%
Process Industries 4.7%
Utilities 3.2%
Commercial Services 3.1%
Non-Energy Minerals 3.0%
Electronic Technology 2.8%
Health Technology 2.0%
Real Estate Development 1.9%
Communications 1.9%
Other 2.6%
Short-Term Investments &
Other Net Assets 3.4%

18 SEMIANNUAL REPORT

As always, we adhered to our investment strategy during the period. For many
investors, the term "micro-cap" conjures up images of start-ups or early stage
companies. In fact, we follow the same conservative guidelines as Franklin
Balance Sheet Investment Fund: We look for well-established companies -- at
period-end we owned a few that are more than 100 years old -- and we want them
to be financially sound and run by managements with shareholders' interests in
mind. We like micro-caps because they exist below Wall Street's radar, where we
may be able to exploit the market's inefficiencies. We aim to buy stocks at a
very low price-to-book value, often at discounts to a company's net tangible
assets, and frequently at very low price-to-earnings ratios.

Our approach is entirely company specific, or "bottom-up." We do not try to
guess big picture trends, or take any particular care with sector or industry
weightings. What matters is our ability to see each company's value grow over
time. We assume when we buy a given stock that we may still own it in three,
four or five years. The Fund's turnover was 2.34% in the first half of its
fiscal year 2003 versus 8.99% in the first half of fiscal year 2002. We avoid
companies with too much debt. We want to be sure the company has the financial
strength to work through any immediate problems, or any that may come in the
future. When a small company begins having problems, its resources can be
exhausted quickly, and the stock's liquidity can disappear suddenly and
permanently.

TOP 10 EQUITY HOLDINGS
Franklin MicroCap Value Fund
4/30/03

COMPANY % OF TOTAL
SECTOR/INDUSTRY NET ASSETS
- -----------------------------------

Delta Apparel Inc. 2.6%
CONSUMER NON-DURABLES

American Pacific Corp. 2.5%
PROCESS INDUSTRIES

Haggar Corp. 2.4%
CONSUMER NON-DURABLES

Courier Corp. 2.4%
COMMERCIAL SERVICES

Standard Commercial Corp. 2.3%
CONSUMER NON-DURABLES

First Defiance Financial Corp. 2.3%
SAVINGS BANKS

Brown Shoe Co. Inc. 2.3%
CONSUMER NON-DURABLES

Rofin-Sinar Technologies Inc. 2.3%
PRODUCER MANUFACTURING

Hardinge Inc. 2.3%
PRODUCER MANUFACTURING

GA Financial Inc. 2.2%
SAVINGS BANKS

SEMIANNUAL REPORT 19

[SIDEBAR]
WHAT IS BOOK VALUE?

BOOK VALUE IS A COMPANY'S WORTH BASED ON THE VALUE OF ITS ASSETS MINUS ITS
LIABILITIES AS THEY ARE STATED IN ITS BALANCE SHEET.

The buildup of value over time, as reflected in book value growth, is central to
our investment approach. The illustration we like to use is that we buy at 80%
of book value, book value grows 20% over four years, and by then the stock
trades at 1.5 times book value, still well below the market-average
price-to-book value. In this hypothetical example, our gain is 125% over four
years.

One way we believe our approach is different from that of other value managers
is that we do not try to identify a catalyst that will make a stock perform. In
our experience, our best gains often come at unexpected times and for
unpredictable reasons. Realistically, whatever catalyst we see is seen by others
and is probably priced into the stock already. We let the valuation be the
catalyst. We are more concerned with identifying factors that might keep value
suppressed. Examples would be a management incentive structure that is
counterproductive, or a control block of stock that might resist a takeover.
Once satisfied on these points, we will buy carefully and let nature take its
course.

We expect to make money in one of three ways. First, the market may come around
to our view of the company's value, and the stock appreciates. Second, the stock
stays cheap, and a strategic or financial buyer comes calling with a takeover
offer. Takeovers have been a frequent source of gains in prior periods, although
less so recently, possibly because of tight credit. Third, the relation of
price-to-book value doesn't change, but the book value increases each year, and
the market price gradually moves with it. We are willing to hold such positions
indefinitely.

20 SEMIANNUAL REPORT

You can be sure that we will continue to apply our investment strategy with
caution and patience, and we look forward to the challenges and opportunities
ahead of us in 2003.

SEMIANNUAL REPORT 21

FRANKLIN MICROCAP
VALUE FUND

PERFORMANCE SUMMARY AS OF 4/30/03

PRICE AND DISTRIBUTION INFORMATION

CLASS A CHANGE 4/30/03 10/31/02
- ------------------------------------------------------------------------
Net Asset Value (NAV) -$0.64 $23.45 $24.09
DISTRIBUTIONS (11/1/02-4/30/03)
Short-Term Capital Gain $0.4185
Long-Term Capital Gain $1.0181
-------
Total $1.4366

PERFORMANCE

INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (12/12/95)
- ------------------------------------------------------------------------
Cumulative Total Return 1 +3.25% -11.48% +25.18% +135.32%
Average Annual Total Return 2 -2.69% -16.56% +3.36% +11.39%
Value of $10,000 Investment 3 $9,731 $8,344 $11,799 $22,172
Avg. Ann. Total Return (3/31/03) 4 -14.73% +3.88% +11.20%

- --------------------------------------------------------------------------------
CLASS A: Subject to the current, maximum 5.75% initial sales charge. Prior to
8/3/98, Fund shares were offered at a lower initial sales charge; thus actual
total returns may differ.
- --------------------------------------------------------------------------------

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, maximum sales
charge. 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 and include the current, maximum sales charge.

4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

- --------------------------------------------------------------------------------
Ongoing market volatility can significantly affect short-term performance; more
recent returns may differ from those shown. Investment return and principal
value will fluctuate with market conditions, and you may have a gain or loss
when you sell your shares. The Fund's ability to invest in securities that may
have limited liquidity and in small, relatively new companies involves
additional risks, such as relatively small revenues, limited product lines and
small market share. Historically, these securities have exhibited greater price
volatility than larger-company stocks, especially over the short term. These and
other risks are described more fully in the Fund's prospectus.
- --------------------------------------------------------------------------------

For more current performance, see "Funds and Performance" at
franklintempleton.com or call 1-800/342-5236.

Past performance does not guarantee future results.

22 SEMIANNUAL REPORT

FRANKLIN SMALL CAP VALUE FUND

- --------------------------------------------------------------------------------
YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: FRANKLIN SMALL CAP VALUE FUND SEEKS
LONG-TERM TOTAL RETURN BY INVESTING AT LEAST 80% OF NET ASSETS IN THE SECURITIES
OF SMALL-CAPITALIZATION COMPANIES THAT WE BELIEVE ARE UNDERVALUED. SMALL
CAPITALIZATION COMPANIES ARE THOSE WITH MARKET CAPITALIZATIONS LESS THAN $2.5
BILLION AT THE TIME OF PURCHASE.
- --------------------------------------------------------------------------------

This semiannual report for Franklin Small Cap Value Fund covers the period ended
April 30, 2003. During the six months under review, small capitalization stocks
generally ended up in positive territory and fared sslightly better than large
capitalization stocks. Within the small-cap universe, growth stocks marginally
outpaced their value-oriented counterparts, according to the Frank Russell
Company. The U.S. economy continued to be weak, despite the Federal Reserve
Board's (the Fed's) 0.5% federal funds target rate cut in November 2002, which
brought short-term interest rates to a 41-year low of 1.25%. Although there were
few props for the troubled economy, the Fed rate cut did manage to spur a strong
surge in mortgage refinancing and home purchases.

Within this difficult environment, Franklin Small Cap Value Fund - Class A
posted a +3.34% cumulative total return for the six months ended April 30, 2003,
as shown in the Performance Summary beginning on page 27. By comparison, the
benchmark

The dollar value, number of shares or principal amount, and complete legal
titles of all portfolio holdings are listed in the Fund's Statement of
Investments (SOI). The SOI begins on page 54.

SEMIANNUAL REPORT 23

Russell 2000 Value Index rose 7.44% during the same time. 1 Broader stock market
performance was mixed compared with the Fund's, as the Dow Jones Industrial
Average, Standard & Poor's 500 Composite Index (S&P 500) and technology-heavy
Nasdaq Composite Index (Nasdaq) returned 2.18%, 4.47% and 10.53%, respectively,
over the reporting period. 2 While the Fund's performance suffered largely from
broader market trends, our financial services holdings were particularly
disappointing, mainly due to the lowest interest rates in four decades. The
Fund's losses were mitigated by strong gains in selected portfolio holdings
across disparate sectors, and included successful buy-outs of three acquisition
targets from unrelated industries.

Our value investment strategy focuses on securities that sell at low prices
compared with the underlying companies' earnings, cash flow, book value or
sales. We also search for understated assets such as real estate, tax-loss carry
forwards or valuable intangibles such as patents or distribution networks. We
consider "fallen angels"-- former growth companies that have suffered short-term
setbacks and sharp share price declines, but in our view still retain
significant long-term potential. We were pleased that cash flows into the Fund
rose during the reporting period, and believe the generally weak and uncertain
equity market environment provided many opportunities to buy stocks of great
companies selling at prices well below our estimate of

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

Portfolio Breakdown
Franklin Small Cap Value Fund
Based on Total Net Assets
4/30/03

Producer Manufacturing 20.6%
Transportation 9.5%
Consumer Durables 8.3%
Energy Minerals 8.2%
Process Industries 7.6%
Industrial Services 6.3%
Financial Conglomerates 5.8%
Consumer Non-Durables 5.7%
Electronic Technology 5.2%
Retail Trade 4.9%
Finance 4.7%
Non-Energy Minerals 2.5%
Consumer Services 2.2%
Technology Services 2.0%
Health Technology 1.3%
Closed End Mutual Funds 1.3%
Other 0.9%
Short-Term Investments & Other Net Assets 3.0%

2. Source: Standard & Poor's Micropal. The Dow Jones Industrial Average is
price-weighted based on the average market price of 30 blue chip stocks of
companies that are generally industry leaders. Total return, calculated by
Wilshire Associates Inc., includes reinvested dividends. The S&P 500 consists of
500 stocks chosen for market size, liquidity and industry group representation.
Each stock's weight in the index is proportionate to its market value. The S&P
500 is one of the most widely used benchmarks of U.S. equity performance. The
Nasdaq Composite Index measures all domestic and international common stocks
listed on the Nasdaq Stock Market. The index is market value-weighted and
includes over 4,000 companies.

The indexes are unmanaged and include reinvested dividends. One cannot invest
directly in an index, nor is an index representative of the Fund's portfolio.

24 SEMIANNUAL REPORT

their true worth. As patient investors, we often benefit from such bargains as
other investors eventually recognize their value and bid up share prices over
time.

Strategic buyers, largely absent since the end of 2001 according to our
analysis, emerged during the six months under review and announced the purchase
of three Fund holdings: Airborne was bought out by Deutsche Post; Holly Corp.
was acquired by Frontier Oil; and Clayton Homes was picked up by Berkshire
Hathaway -- all at premiums to their prior day closing prices.

Two stellar Fund performers during the period were Lone Star Technologies and
Brown Shoe Company. Lone Star, a leading oil-field equipment manufacturer,
experienced increased demand for its products due to rising oil prices. Brown
Shoe is a 124-year-old U.S. and Canadian retail shoe store operator with the
well-known Buster Brown brand name for children. During the company's 2001
fiscal year, Brown Shoe management initiated a broad program to improve
profitability and competitiveness. The company began to reap the benefits in the
form of improved margins and increased market share. Selling at just 11.9 times
2003 earnings estimates and 1.7 times book value at period-end, we consider
Brown Shoe a good value.

We initiated six positions in the portfolio during the reporting period, all
possessing what we believed were strong financial positions, quality managements
and attractive stock price valuations. These included Cabot, American Woodmark,
Monaco Coach, Oshkosh B'Gosh, Peoples Bancorp and West Marine. We also
eliminated six Fund positions -- ESCO Technologies because we believed it was
fully valued, and others due to deteriorating fundamentals, including SPACEHAB
convertible bonds and stocks of DIMON, Northeast Utilities, Stolt-Nielsen and
Tropical Sportswear International.

We remain optimistic for the long term despite recent weakness

[SIDEBAR]
WHAT IS BOOK VALUE?

BOOK VALUE IS A COMPANY'S WORTH BASED ON THE VALUE OF ITS ASSETS MINUS ITS
LIABILITIES AS THEY ARE STATED IN ITS BALANCE SHEET.

SEMIANNUAL REPORT 25

TOP 10 EQUITY HOLDINGS
Franklin Small Cap Value Fund
4/30/03

COMPANY % OF TOTAL
SECTOR/INDUSTRY NET ASSETS
- -------------------------------

Avocent Corp. 2.5%
ELECTRONIC TECHNOLOGY

Russ Berrie & Co. Inc. 2.3%
CONSUMER DURABLES

Peabody Energy Corp. 2.1%
ENERGY MINERALS

Mettler-Toledo International
Inc. (Switzerland) 2.1%
PRODUCER MANUFACTURING

Bunge Ltd. 2.0%
PROCESS INDUSTRIES

Graco Inc. 2.0%
PRODUCER MANUFACTURING

Timberland Co., A 1.9%
CONSUMER NON-DURABLES

Consol Energy Inc. 1.9%
ENERGY MINERALS

Brown Shoe Co. Inc. 1.9%
CONSUMER NON-DURABLES

Teekay Shipping Corp.
(Bahamas) 1.9%
TRANSPORTATION

in the economy and equities markets, and remain steadfast and committed to our
value investment strategy. Given ongoing weakness and investor disaffection, we
will actively seek to take advantage of opportunities to buy what we consider
undervalued, high-quality companies with strong fundamentals. Consequently, we
believe that although near-term volatility and continued steep market declines
may make short-term performance volatile, the Fund is well positioned for the
long term. We believe Franklin Small Cap Value Fund will provide shareholders
with a portfolio of well-managed, financially sound companies with the potential
for solid earnings growth and, with patience, stock price appreciation over
time. As always, we value your support and welcome your questions and comments.

26 SEMIANNUAL REPORT

FRANKLIN SMALL CAP
VALUE FUND

PERFORMANCE SUMMARY AS OF 4/30/03

PRICE INFORMATION

CLASS A CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.74 $22.89 $22.15

CLASS B CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.66 $22.33 $21.67

CLASS C CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.64 $22.10 $21.46

CLASS R CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.72 $22.86 $22.14

ADVISOR CLASS CHANGE 4/30/03 10/31/02
- -----------------------------------------------------------------
Net Asset Value (NAV) +$0.80 $23.33 $22.53

CLASS C: Subject to 1% initial sales charge and 1% CDSC for shares redeemed
within 18 months of investment. These shares have higher annual fees and
expenses than Class A shares.

ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees and are available to a
limited class of investors.
- --------------------------------------------------------------------------------

Past performance does not guarantee future results.

SEMIANNUAL REPORT 27

PERFORMANCE SUMMARY (CONT.)

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.

3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include any current, applicable, maximum
sales charge(s).

4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

6. Effective 1/2/97, the Fund began offering Advisor Class shares, which do not
have sales charges or a Rule 12b-1 plan. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 1/2/97, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge, but reflecting the effect of
the Class A Rule 12b-1 fees; and (b) for periods after 1/1/97, actual Advisor
Class performance is used reflecting all charges and fees applicable to that
class. Since 1/2/97 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were +27.59% and +3.92%.

PERFORMANCE

INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (3/11/96)
- -------------------------------------------------------------------------
Cumulative Total Return 1 +3.34% -21.34% -9.91% +59.65%
Average Annual Total Return 2 -2.60% -25.87% -3.22% +5.89%
Value of $10,000 Investment 3 $9,740 $7,413 $8,492 $15,042
Avg. Ann. Total Return (3/31/03) 4 -29.97% -4.87% +4.73%

INCEPTION
CLASS B 6-MONTH 1-YEAR 3-YEAR (1/1/99)
- -------------------------------------------------------------------------
Cumulative Total Return 1 +3.05% -21.84% +18.72% +21.83%
Average Annual Total Return 2 -0.95% -24.97% +4.99% +4.27%
Value of $10,000 Investment 3 $9,905 $7,503 $11,572 $11,983
Avg. Ann. Total Return (3/31/03) 4 -29.15% +2.78% +2.32%

INCEPTION
CLASS C 6-MONTH 1-YEAR 5-YEAR (9/3/96)
- -------------------------------------------------------------------------
Cumulative Total Return 1 +2.98% -21.85% -12.79% +40.21%
Average Annual Total Return 2 +0.95% -23.42% -2.90% +5.06%
Value of $10,000 Investment 3 $10,095 $7,658 $8,632 $13,885
Avg. Ann. Total Return (3/31/03) 4 -27.68% -4.55% +3.82%

INCEPTION
CLASS R 6-MONTH (8/1/02)
- --------------------------------------------------------------------------------
Cumulative Total Return 1 +3.25% -2.06%
Aggregate Total Return 5 +2.25% -3.04%
Value of $10,000 Investment 3 $10,225 $9,696
Aggregate Total Return (3/31/03) 4, 5 -10.71%

INCEPTION
ADVISOR CLASS 6 6-MONTH 1-YEAR 5-YEAR (3/11/96)
- -------------------------------------------------------------------------
Cumulative Total Return 1 +3.55% -21.05% -8.22% +64.81%
Average Annual Total Return 2 +3.55% -21.05% -1.70% +7.25%
Value of $10,000 Investment 3 $10,355 $7,895 $9,178 $16,481
Avg. Ann. Total Return (3/31/03) 4 -25.42% -3.37% +6.09%

- --------------------------------------------------------------------------------
Ongoing market volatility can significantly affect short-term performance; more
recent returns may differ from those shown. Investment return and principal
value will fluctuate with market conditions, and you may have a gain or loss
when you sell your shares. The Fund's investments in small-company stocks
involves special risks as such stocks have historically exhibited greater price
volatility than large-company stocks, especially over the short term. These and
other risks are described more fully in the Fund's prospectus.
- --------------------------------------------------------------------------------

For more current performance, see "Funds and Performance" at
franklintempleton.com or call 1-800/342-5236.

Past performance does not guarantee future results.

28 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights

FRANKLIN BALANCE SHEET INVESTMENT FUND
CLASS A
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ---------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
--------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ........ $37.01 $37.21 $34.83 $29.96 $31.86 $35.22
--------------------------------------------------------------------------
Income from investment operations:
Net investment income a .................... .10 .25 .77 .31 .37 .50
Net realized and unrealized gains (losses) . .78 .87 2.95 5.15 (.68) (1.55)
--------------------------------------------------------------------------
Total from investment operations ............ .88 1.12 3.72 5.46 (.31) (1.05)
--------------------------------------------------------------------------
Less distributions from:
Net investment income ...................... (.25) (.15) (.73) (.31) (.43) (.51)
Net realized gains ......................... (.25) (1.17) (.61) (.28) (1.16) (1.80)
--------------------------------------------------------------------------
Total distributions ......................... (.50) (1.32) (1.34) (.59) (1.59) (2.31)
--------------------------------------------------------------------------
Net asset value, end of period .............. $37.39 $37.01 $37.21 $34.83 $29.96 $31.86
--------------------------------------------------------------------------

Total return b .............................. 2.38% 2.85% 10.96% 18.47% (1.04)% (3.14)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ........... $2,457,403 $2,333,862 $1,491,457 $1,067,893 $1,165,779 $1,467,207
Ratios to average net assets:
Expenses ................................... .95%c .92% .96% 1.06% .93% .93%
Net investment income ...................... .45%c .63% 2.14% 1.00% 1.19% 1.47%
Portfolio turnover rate ..................... 7.10% 10.59% 26.69% 8.69% 17.53% 11.81%

<FN>
a Based on average shares outstanding effective year ended October 31, 1999.
b Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
c Annualized
</FN>

SEMIANNUAL REPORT 29

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN BALANCE SHEET INVESTMENT FUND (CONT.)
CLASS B
----------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 -----------------------
(UNAUDITED) 2002 2001 C
----------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ................... $36.64 $37.04 $37.26
----------------------------------------
Income from investment operations:
Net investment income (loss) a ........................ (.04) (.08) .28
Net realized and unrealized gains (losses) ............ .78 .91 .06
----------------------------------------
Total from investment operations ....................... .74 .83 .34
----------------------------------------
Less distributions from:
Net investment income ................................. (.01) (.06) (.56)
Net realized gains .................................... (.25) (1.17) --
----------------------------------------
Total distributions .................................... (.26) (1.23) (.56)
----------------------------------------
Net asset value, end of period ......................... $37.12 $36.64 $37.04
----------------------------------------

Total return b ......................................... 2.01% 2.08% .91%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ...................... $87,710 $89,241 $20,982
Ratios to average net assets:
Expenses .............................................. 1.70%d 1.67% 1.71%d
Net investment income (loss) .......................... (.30)%d (.12)% .73%d
Portfolio turnover rate ................................ 7.10% 10.59% 26.69%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is
not annualized for periods less than one year.
c For the period March 1, 2001 (effective date) to October 31, 2001.
d Annualized
</FN>

30 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN BALANCE SHEET INVESTMENT FUND (CONT.)
CLASS C
----------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ----------------------
(UNAUDITED) 2002 2001 C
----------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period .................... $36.67 $37.06 $37.26
----------------------------------------
Income from investment operations:
Net investment income (loss) a ......................... (.03) (.08) .33
Net realized and unrealized gains (losses) ............. .77 .92 .02
----------------------------------------
Total from investment operations ........................ .74 .84 .35
----------------------------------------
Less distributions from:
Net investment income .................................. -- (.06) (.55)
Net realized gains ..................................... (.25) (1.17) --
----------------------------------------
Total distributions ..................................... (.25) (1.23) (.55)
----------------------------------------
Net asset value, end of period .......................... $37.16 $36.67 $37.06
----------------------------------------

Total return b .......................................... 2.02% 2.10% .94%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ....................... $111,025 $118,219 $29,920
Ratios to average net assets:
Expenses ............................................... 1.69%d 1.67% 1.71%d
Net investment income (loss) ........................... (.29)%d (.12)% .85%d
Portfolio turnover rate ................................. 7.10% 10.59% 26.69%

<FN>
a Based on average shares outstanding.
b Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
c For the period March 1, 2001 (effective date) to October 31, 2001.
d Annualized
</FN>

SEMIANNUAL REPORT 31

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN BALANCE SHEET INVESTMENT FUND (CONT.)
CLASS R
----------------------------------
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2002 C
----------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ...................... $36.92 $39.98
----------------------------------
Income from investment operations:
Net investment income a .................................. .05 .07
Net realized and unrealized gains (losses) ............... .80 (3.07)
----------------------------------
Total from investment operations .......................... .85 (3.00)
----------------------------------
Less distributions from:
Net investment income .................................... (.22) (.06)
Net realized gains ....................................... (.25) --
----------------------------------
Total distributions ....................................... (.47) (.06)
----------------------------------
Net asset value, end of period ............................ $37.30 $36.92
----------------------------------

Total return b ............................................ 2.31% (7.53)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......................... $9,131 $7,754
Ratios to average net assets:
Expenses d ............................................... 1.20% 1.17%
Net investment income d .................................. .20% .38%
Portfolio turnover rate ................................... 7.10% 10.59%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is
not annualized for periods less than one year.
c For the period January 1, 2002 (effective date) to October 31, 2002.
d Annualized
</FN>

32 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN BALANCE SHEET INVESTMENT FUND (CONT.)
ADVISOR CLASS
----------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 -----------------------
(UNAUDITED) 2002 2001 C
----------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ................................... $37.06 $37.21 $37.26
----------------------------------------
Income from investment operations:
Net investment income a ............................................... .14 .31 .60
Net realized and unrealized gains (losses) ............................ .79 .91 (.02)
----------------------------------------
Total from investment operations ....................................... .93 1.22 .58
----------------------------------------
Less distributions from:
Net investment income ................................................. (.33) (.20) (.63)
Net realized gains .................................................... (.25) (1.17) --
----------------------------------------
Total distributions .................................................... (.58) (1.37) (.63)
----------------------------------------
Net asset value, end of period ......................................... $37.41 $37.06 $37.21
----------------------------------------

Total return b ......................................................... 2.49% 3.11% 1.56%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ...................................... $17,005 $15,193 $571
Ratios to average net assets:
Expenses .............................................................. .70%d .67% .71%d
Net investment income ................................................. .70%d .88% 1.55%d
Portfolio turnover rate ................................................ 7.10% 10.59% 26.69%

<FN>
a Based on average shares outstanding.
b Total return is not annualized for periods less than one year.
c For the period March 1, 2001 (effective date) to October 31, 2001.
d Annualized
</FN>

See notes to financial statements.

SEMIANNUAL REPORT 33

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED)

FRANKLIN BALANCE SHEET INVESTMENT FUND SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
CLOSED END MUTUAL FUNDS 1.5%

a Emerging Markets Telecommunications Fund Inc. ............................. 250,000 $ 1,422,500
H & Q Healthcare Investors Fund ........................................... 150,000 2,419,500
High Income Opportunity Fund .............................................. 765,600 5,420,448
John Hancock Bank & Thrift Opportunity Fund ............................... 1,650,000 12,523,500
Latin America Equity Fund Inc. ............................................ 222,015 2,397,762
Managed High Income Portfolio Inc. ........................................ 695,800 4,968,013
Mexico Fund (Mexico) ...................................................... 620,800 7,884,160
a New Ireland Fund Inc. (Irish Republic) .................................... 135,000 1,366,200
Petroleum & Resources Corp. ............................................... 150,000 2,842,500
--------------
TOTAL CLOSED END MUTUAL FUNDS (COST $48,469,885) .......................... 41,244,583
--------------
COMMON STOCKS 67.8%
COMMERCIAL SERVICES 1.3%
Kelly Services Inc., A .................................................... 1,506,800 34,882,420
--------------
CONSUMER DURABLES 6.2%
Clayton Homes Inc. ........................................................ 3,600,000 44,676,000
D.R. Horton Inc. .......................................................... 1,100,000 26,070,000
a Dixie Group Inc. .......................................................... 370,000 1,106,300
Hasbro Inc. ............................................................... 1,800,000 28,800,000
Lennar Corp. .............................................................. 240,000 13,017,600
Lennar Corp., B ........................................................... 24,000 1,285,200
M.D.C. Holdings Inc. ...................................................... 300,000 13,830,000
Pulte Homes Inc. .......................................................... 650,000 37,693,500
--------------
166,478,600
--------------
CONSUMER NON-DURABLES 2.2%
b DIMON Inc. ................................................................ 2,504,200 16,427,552
a Genesee Corp., B .......................................................... 117,900 575,942
Kellwood Co. .............................................................. 175,000 5,183,500
a Tommy Hilfiger Corp. ...................................................... 3,770,100 30,990,222
Universal Corp. ........................................................... 125,000 4,881,250
--------------
58,058,466
--------------
CONSUMER SERVICES 1.9%
a,bAztar Corp. .............................................................. 3,000,000 42,720,000
a,bChampps Entertainment Inc. ............................................... 920,000 4,811,600
a Prime Hospitality Corp. ................................................... 527,500 3,513,150
--------------
51,044,750
--------------
DISTRIBUTION SERVICES 1.4%
Applied Industrial Technologies Inc. ...................................... 570,000 10,539,300
a,bHandleman Co. ............................................................ 1,595,000 27,035,250
--------------
37,574,550
--------------
ELECTRONIC TECHNOLOGY 2.3%
a ESCO Technologies Inc. .................................................... 618,400 24,247,464
a FSI International Inc. .................................................... 650,000 1,534,000
a Hutchinson Technology Inc. ................................................ 575,000 13,593,000

34 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN BALANCE SHEET INVESTMENT FUND SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
ELECTRONIC TECHNOLOGY (CONT.)

a Intergraph Corp. .......................................................... 850,000 $ 17,340,000
a Standard Microsystems Corp. ............................................... 500,000 6,330,000
--------------
63,044,464
--------------
ENERGY MINERALS 1.6%
Peabody Energy Corp. ...................................................... 1,507,000 42,346,700
--------------
FINANCE/RENTAL/LEASING 1.6%
CIT Group Inc. ............................................................ 2,100,000 42,777,000
--------------
FINANCIAL CONGLOMERATES 3.1%
Principal Financial Group ................................................. 734,200 21,365,220
Prudential Financial Inc. ................................................. 1,010,000 32,289,700
StanCorp Financial Group Inc. ............................................. 535,000 28,729,500
--------------
82,384,420
--------------
INDUSTRIAL SERVICES 1.2%
a Global Industries Ltd. .................................................... 1,413,500 6,275,940
a Offshore Logistics Inc. ................................................... 860,000 16,340,000
a Petroleum Helicopters Inc. ................................................ 77,500 1,970,825
a Petroleum Helicopters Inc., non-voting .................................... 152,000 3,784,800
a,bXanser Corp. ............................................................. 2,800,000 4,900,000
--------------
33,271,565
--------------
LIFE/HEALTH INSURANCE 4.6%
American National Insurance Co. ........................................... 637,200 50,976,000
Amerus Group Co. .......................................................... 250,000 6,547,500
FBL Financial Group Inc., A ............................................... 550,000 11,044,000
Kansas City Life Insurance Co. ............................................ 162,600 6,614,568
Manulife Financial Corp. (Canada) ......................................... 500,000 13,320,000
MetLife Inc. .............................................................. 401,000 11,520,730
a National Western Life Insurance Co., A .................................... 150,000 14,866,500
Presidential Life Corp. ................................................... 900,000 7,272,000
--------------
122,161,298
--------------
NON-ENERGY MINERALS 3.3%
Nucor Corp. ............................................................... 630,000 25,735,500
Reliance Steel & Aluminum Co. ............................................. 1,175,000 19,975,000
Texas Industries Inc. ..................................................... 675,000 13,324,500
United States Steel Corp. ................................................. 2,100,000 30,072,000
--------------
89,107,000
--------------
PROCESS INDUSTRIES 4.1%
Bunge Ltd. ................................................................ 1,650,000 46,216,500
Corn Products International Inc. .......................................... 1,075,000 32,121,000
a,bDelta Woodside Industries Inc. ........................................... 560,000 1,948,800
J.G. Boswell Co. .......................................................... 30,000 9,000,000
Monsanto Co. .............................................................. 800,000 13,920,000
Polyone Corp. ............................................................. 1,271,100 5,872,482
--------------
109,078,782
--------------

SEMIANNUAL REPORT 35

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

CNH Global NV (Netherlands) ............................................... 1,605,000 $ 14,011,650
a,bInsteel Industries Inc. .................................................. 560,000 380,800
Lennox International Inc. ................................................. 1,115,000 16,568,900
a Mueller Industries Inc. ................................................... 90,600 2,314,830
Oshkosh Truck Corp. ....................................................... 240,000 13,440,000
Tecumseh Products Co., A .................................................. 500,000 20,120,000
b Tecumseh Products Co., B .................................................. 275,000 10,587,500
Timken Co. ................................................................ 1,400,000 24,780,000
Trinity Industries Inc. ................................................... 1,725,900 28,563,645
--------------
130,767,325
--------------
PROPERTY-CASUALTY INSURANCE 6.2%
E-L Financial Corp. Ltd. (Canada) ......................................... 100,000 16,921,093
IPC Holdings Ltd. (Bermuda) ............................................... 1,180,000 40,533,000
Old Republic International Corp. .......................................... 1,660,400 50,808,240
RLI Corp. ................................................................. 489,400 14,461,770
Selective Insurance Group Inc. ............................................ 600,000 15,054,000
St. Paul Cos. Inc. ........................................................ 827,000 28,399,180
--------------
166,177,283
--------------
RETAIL TRADE 7.4%
a Big Lots Inc. ............................................................. 1,425,000 17,841,000
Cato Corp., A ............................................................. 300,000 6,150,000
a Charming Shoppes Inc. ..................................................... 5,200,000 24,440,000
Dillards Inc., A .......................................................... 1,500,000 20,970,000
a Federated Department Stores Inc. .......................................... 825,000 25,261,500
Fred's Inc. ............................................................... 435,000 14,115,750
b Haverty Furniture Cos. Inc. ............................................... 920,000 12,926,000
a Officemax Inc. ............................................................ 550,000 3,107,500
a Saks Inc. ................................................................. 1,300,000 11,635,000
a,bSyms Corp. ............................................................... 1,430,000 10,138,700
a Toys R Us Inc. ............................................................ 2,769,300 28,385,325
a Zale Corp. ................................................................ 711,200 24,849,328
--------------
199,820,103
--------------
SAVINGS BANKS .4%
Farmers & Merchants Bank of Long Beach .................................... 2,200 8,107,000
First Niagara Financial Group Inc. ........................................ 120,000 1,458,000
--------------
9,565,000
--------------
SPECIALTY INSURANCE 3.0%
MGIC Investment Corp. ..................................................... 390,000 17,729,400
The PMI Group Inc. ........................................................ 890,000 27,429,800
Radian Group Inc. ......................................................... 645,000 25,606,500
a Stewart Information Services Corp. ........................................ 388,600 10,367,848
--------------
81,133,548
--------------

36 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

Airborne Inc. ............................................................. 1,825,000 $ 36,244,500
a,bAlaska Air Group Inc. .................................................... 1,350,600 24,081,198
Burlington Northern Santa Fe Corp. ........................................ 555,000 15,628,800
a Crowley Maritime Corp. .................................................... 4,240 4,929,000
a,bDollar Thrifty Automotive Group Inc. ..................................... 1,751,200 28,737,192
a Mesa Air Group Inc. ....................................................... 1,050,000 5,649,000
Overseas Shipholding Group Inc. ........................................... 1,700,000 31,977,000
Teekay Shipping Corp. (Bahamas) ........................................... 850,000 32,257,500
--------------
179,504,190
--------------
UTILITIES 4.4%
Entergy Corp. ............................................................. 800,000 37,288,000
Northeast Utilities ....................................................... 1,750,000 26,110,000
PNM Resources Inc. ........................................................ 1,242,200 27,564,418
a Sierra Pacific Resources .................................................. 4,169,000 15,383,610
Xcel Energy Inc. .......................................................... 878,000 11,870,559
--------------
118,216,587
--------------
TOTAL COMMON STOCKS (COST $1,673,248,192) ................................. 1,817,394,051
--------------
PREFERRED STOCK (COST $6,943,575) .3%
Price Legacy Corp., 8.75%, pfd., A ........................................ 533,400 8,774,430
--------------

PRINCIPAL
AMOUNT
---------
CONVERTIBLE BOND (COST $6,000,000) .3%
UTILITIES
Sierra Pacific Resources Co., cvt., 144A, 7.25%, 2/14/10 .................. $ 6,000,000 7,155,000
--------------
CORPORATE BOND (COST $4,576,762)
c Hechinger Co., 6.95%, 10/15/03 ............................................ 7,000,000 175,000
--------------
TOTAL LONG TERM INVESTMENTS (COST $1,739,238,414) ......................... 1,874,743,064
--------------

SHARES
----------
SHORT TERM INVESTMENT (COST $167,074,585) 6.2%
d Franklin Institutional Fiduciary Trust Money Market Portfolio ............. 167,074,585 167,074,585
--------------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT (COST $1,906,312,999) ....... 2,041,817,649
--------------

SEMIANNUAL REPORT 37

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

PRINCIPAL
FRANKLIN BALANCE SHEET INVESTMENT FUND AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT 24.3%

e Joint Repurchase Agreement, 1.286%, 5/01/03, (Maturity Value $651,614,889)
(COST $651,591,613) ......................................................$651,591,613 $ 651,591,613
ABN AMRO Bank, N.V., New York Branch (Maturity Value $64,946,456)
Banc of America Securities LLC (Maturity Value $64,946,456)
Barclays Capital Inc. (Maturity Value $57,726,563)
Bear, Stearns & Co. Inc. (Maturity Value $57,726,563)
BNP Paribas Securities Corp. (Maturity Value $64,946,456)
Deutsche Bank Securities Inc. (Maturity Value $64,946,456)
Dresdner Kleinwort Wasserstein Securities LLC (Maturity Value $64,946,456)
Goldman, Sachs & Co. (Maturity Value $57,726,563)
Lehman Brothers Inc. (Maturity Value $23,810,008)
Morgan Stanley & Co. Inc. (Maturity Value $64,946,456)
UBS Warburg LLC (Maturity Value $64,946,456)
Collateralized by U.S. Treasury Bills, Notes, and Bonds, and U.S.
Government Agency Securities
--------------
TOTAL INVESTMENTS (COST $2,557,904,612) 100.4% ...................................... 2,693,409,262
OTHER ASSETS, LESS LIABILITIES (.4)% ................................................ (11,136,718)
--------------
NET ASSETS 100.0% ................................................................... $2,682,272,544
--------------

<FN>
a Non-income producing
b See Note 7 regarding holdings of 5% voting securities.
c The Fund discontinues accruing income on defaulted bonds and provides an estimate for losses on interest receivable.
d See Note 6 regarding investments in the Franklin Institutional Fiduciary Trust Money Market Portfolio.
e See Note 1(c) regarding joint repurchase agreement.
</FN>

See notes to financial statements.

38 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights

FRANKLIN LARGE CAP VALUE FUND
CLASS A
----------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 -----------------------------
(UNAUDITED) 2002 2001 2000 C
----------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period .......................... $10.48 $11.66 $11.12 $10.00
----------------------------------------------
Income from investment operations:
Net investment income a ...................................... .03 .07 .12 .09
Net realized and unrealized gains (losses) ................... .37 (1.08) .50 1.03
----------------------------------------------
Total from investment operations .............................. .40 (1.01) .62 1.12
----------------------------------------------
Less distributions from:
Net investment income ........................................ (.07) (.07) (.08) --
Net realized gains ........................................... -- (.10) -- --
----------------------------------------------
Total distributions ........................................... (.07) (.17) (.08) --
----------------------------------------------
Net asset value, end of period ................................ $10.81 $10.48 $11.66 $11.12
----------------------------------------------

Total return b ................................................ 3.81% (8.82)% 5.63% 11.20%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............................. $36,986 $32,825 $23,544 $3,418
Ratios to average net assets:
Expenses ..................................................... 1.41%d 1.42% 1.25% 1.25%d
Expenses excluding waiver and payments by affiliate .......... 1.41%d 1.42% 1.49% 3.22%d
Net investment income ........................................ .65%d .64% .99% 2.17%d
Portfolio turnover rate ....................................... 10.25% 15.33% 29.37% 7.21%

<FN>
a Based on average shares outstanding.
b Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
c For the period June 1, 2000 (effective date) to October 31, 2000.
d Annualized
</FN>

SEMIANNUAL REPORT 39

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN LARGE CAP VALUE FUND (CONT.)
CLASS B
---------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 -----------------------------
(UNAUDITED) 2002 2001 2000 C
---------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ......................... $10.39 $11.58 $11.11 $10.00
---------------------------------------------
Income from investment operations:
Net investment income (loss) a .............................. -- -- .05 .08
Net realized and unrealized gains (losses) .................. .37 (1.07) .49 1.03
---------------------------------------------
Total from investment operations ............................. .37 (1.07) .54 1.11
---------------------------------------------
Less distributions from:
Net investment income ....................................... (.01) (.02) (.07) --
Net realized gains .......................................... -- (.10) -- --
---------------------------------------------
Total distributions .......................................... (.01) (.12) (.07) --
---------------------------------------------
Net asset value, end of period ............................... $10.75 $10.39 $11.58 $11.11
---------------------------------------------

Total return b ............................................... 3.52% (9.38)% 4.87% 11.10%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............................ $5,793 $4,975 $3,251 $453
Ratios to average net assets:
Expenses .................................................... 2.06%d 2.07% 1.86% 1.69%d
Expenses excluding waiver and payments by affiliate ......... 2.06%d 2.07% 2.10% 3.66%d
Net investment income (loss) ................................ --d (.01)% .38% 1.81%d
Portfolio turnover rate ...................................... 10.25% 15.33% 29.37% 7.21%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is not
annualized for periods less than one year.
c For the period June 1, 2000 (effective date) to October 31, 2000.
d Annualized
</FN>

40 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN LARGE CAP VALUE FUND (CONT.)
CLASS C
----------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ------------------------------
(UNAUDITED) 2002 2001 2000 C
----------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ........................... $10.39 $11.57 $11.11 $10.00
----------------------------------------------
Income from investment operations:
Net investment income (loss) a ................................ -- -- .05 .06
Net realized and unrealized gains (losses) .................... .36 (1.07) .48 1.05
----------------------------------------------
Total from investment operations ............................... .36 (1.07) .53 1.11
----------------------------------------------
Less distributions from:
Net investment income ......................................... (.01) (.01) (.07) --
Net realized gains ............................................ -- (.10) -- --
----------------------------------------------
Total distributions ............................................ (.01) (.11) (.07) --
----------------------------------------------
Net asset value, end of period ................................. $10.74 $10.39 $11.57 $11.11
----------------------------------------------

Total return b ................................................. 3.51% (9.34)% 4.80% 11.10%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .............................. $21,376 $17,738 $10,648 $1,911
Ratios to average net assets:
Expenses ...................................................... 2.09%d 2.04% 1.89% 1.79%d
Expenses excluding waiver and payments by affiliate ........... 2.09%d 2.04% 2.13% 3.76%d
Net investment income (loss) .................................. (.03)%d .02% .38% 1.44%d
Portfolio turnover rate ........................................ 10.25% 15.33% 29.37% 7.21%

<FN>
a Based on average shares outstanding.
b Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
c For the period June 1, 2000 (effective date) to October 31, 2000.
d Annualized
</FN>

SEMIANNUAL REPORT 41

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN LARGE CAP VALUE FUND (CONT.)
CLASS R
----------------------------------
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2002 C
----------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ........................... $10.48 $10.55
----------------------------------
Income from investment operations:
Net investment income a ....................................... .02 .01
Net realized and unrealized gains (losses) .................... .37 (.08)
----------------------------------
Total from investment operations ............................... .39 (.07)
----------------------------------
Less distributions from net investment income .................. (.09) --
----------------------------------
Net asset value, end of period ................................. $10.78 $10.48
----------------------------------

Total return b ................................................. 3.76% (.66)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .............................. $292 $65
Ratios to average net assets:
Expenses d .................................................... 1.56% 1.59%
Net investment income d ....................................... .50% .47%
Portfolio turnover rate ........................................ 10.25% 15.33%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is
not annualized for periods less than one year.
c For the period August 1, 2002 (effective date) to October 31, 2002.
d Annualized
</FN>

See notes to financial statements.

42 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED)

FRANKLIN LARGE CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS 88.4%
COMMUNICATIONS 4.0%

SBC Communications Inc. .......................................................... 48,000 $ 1,121,280
Verizon Communications Inc. ...................................................... 38,500 1,439,130
-----------
2,560,410
-----------
CONSUMER NON-DURABLES 4.2%
Kimberly-Clark Corp. ............................................................. 22,500 1,119,825
Sara Lee Corp. ................................................................... 96,000 1,610,880
-----------
2,730,705
-----------
CONSUMER SERVICES 6.7%
aCendant Corp. .................................................................... 154,000 2,199,120
McDonald's Corp. ................................................................. 124,000 2,120,400
-----------
4,319,520
-----------
ELECTRONIC TECHNOLOGY 1.6%
Hewlett-Packard Co. .............................................................. 65,000 1,059,500
-----------

ENERGY MINERALS 7.7%
Anadarko Petroleum Corp. ......................................................... 42,000 1,864,800
ConocoPhillips ................................................................... 23,000 1,156,900
Marathon Oil Corp. ............................................................... 84,000 1,912,680
-----------
4,934,380
-----------
FINANCE/RENTAL/LEASING 4.0%
Fannie Mae ....................................................................... 17,500 1,266,825
Freddie Mac ...................................................................... 23,000 1,331,700
-----------
2,598,525
-----------
FINANCIAL CONGLOMERATES 4.3%
Citigroup Inc. ................................................................... 52,000 2,041,000
Principal Financial Group. ....................................................... 26,000 756,600
-----------
2,797,600
-----------
HEALTH TECHNOLOGY 5.4%
Becton, Dickinson & Co. .......................................................... 43,500 1,539,900
Pfizer Inc. ...................................................................... 60,000 1,845,000
-----------
3,384,900
-----------
INDUSTRIAL SERVICES 3.3%
GlobalSantaFe Corp. .............................................................. 55,000 1,163,800
aTransocean Inc. .................................................................. 52,000 990,600
-----------
2,154,400
-----------
INVESTMENT BANKS/BROKERS 4.2%
Lehman Brothers Holdings Inc. .................................................... 22,000 1,385,340
Morgan Stanley ................................................................... 29,000 1,297,750
-----------
2,683,090
-----------
LIFE/HEALTH INSURANCE 2.8%
MetLife Inc. ..................................................................... 62,500 1,795,625
-----------

SEMIANNUAL REPORT 43

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN LARGE CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
MAJOR BANKS 7.1%

Bank of America Corp. ............................................................ 15,500 $ 1,147,775
Fleet Boston Financial Corp. ..................................................... 56,000 1,485,120
Mellon Financial Corp. ........................................................... 73,000 1,930,850
-----------
4,563,745
-----------
MULTI-LINE INSURANCE 2.3%
American International Group Inc. ................................................ 25,500 1,477,725
-----------
PROCESS INDUSTRIES 2.8%
International Paper Co. .......................................................... 51,000 1,823,250
-----------
PRODUCER MANUFACTURING 4.8%
Honeywell International Inc. ..................................................... 72,000 1,699,200
Masco Corp. ...................................................................... 66,000 1,390,620
-----------
3,089,820
-----------
PROPERTY-CASUALTY INSURANCE 5.8%
Allstate Corp. ................................................................... 50,000 1,889,500
St. Paul Cos. Inc. ............................................................... 51,500 1,768,510
Travelers Property Casualty Corp., A ............................................. 2,095 34,002
Travelers Property Casualty Corp., B ............................................. 4,305 69,956
-----------
3,761,968
-----------
REAL ESTATE INVESTMENT TRUSTS 2.2%
Equity Office Properties Trust ................................................... 54,500 1,415,365
-----------
REGIONAL BANKS 1.7%
U.S. Bancorp ..................................................................... 49,500 1,096,425
-----------
RETAIL TRADE 5.5%
Federated Department Stores Inc. ................................................. 63,500 1,944,370
aSafeway Inc. ..................................................................... 57,000 947,340
The TJX Cos. Inc. ................................................................ 32,000 616,000
-----------
3,507,710
-----------
SAVINGS BANKS 1.9%
Washington Mutual Inc. ........................................................... 31,500 1,244,250
-----------
SPECIALTY INSURANCE 1.5%
MGIC Investment Corp. ............................................................ 21,000 954,660
-----------
TECHNOLOGY SERVICES 2.2%
International Business Machines Corp. ............................................ 17,000 1,443,300
-----------
TRANSPORTATION 2.4%
Burlington Northern Santa Fe Corp. ............................................... 55,500 1,562,880
-----------
TOTAL COMMON STOCKS (COST $60,208,555) 56,959,753
-----------
SHORT TERM INVESTMENT (COST $6,969,697) 10.8%
bFranklin Institutional Fiduciary Trust Money Market Portfolio .................... 6,969,697 6,969,697
-----------
TOTAL INVESTMENTS (COST $67,178,252) 99.2% ....................................... 63,929,450
OTHER ASSETS, LESS LIABILITIES .8% ............................................... 517,165
-----------
NET ASSETS 100.0% ................................................................ $64,446,615
-----------

<FN>
a Non-income producing
b See Note 6 regarding investments in the Franklin Institutional Fiduciary
Trust Money Market Portfolio.

</FN>

See notes to financial statements.

44 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights

FRANKLIN MICROCAP VALUE FUND
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
----------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ........ $24.09 $24.64 $18.88 $18.41 $20.27 $24.29
----------------------------------------------------------------
Income from investment operations:
Net investment income (loss) a ............. (.02) (.01) .11 .04 (.01) (.02)
Net realized and unrealized gains (losses) . .82 .68 6.37 1.90 (.29) (2.51)
----------------------------------------------------------------
Total from investment operations ............ .80 .67 6.48 1.94 (.30) (2.53)
----------------------------------------------------------------
Less distributions from:
Net investment income ...................... -- (.08) (.09) -- -- (.01)
Net realized gains ......................... (1.44) (1.14) (.63) (1.47) (1.56) (1.48)
----------------------------------------------------------------
Total distributions ......................... (1.44) (1.22) (.72) (1.47) (1.56) (1.49)
----------------------------------------------------------------
Net asset value, end of period .............. $23.45 $24.09 $24.64 $18.88 $18.41 $20.27
----------------------------------------------------------------
Total return b .............................. 3.25% 2.77% 35.80% 11.53% (1.59)% (10.95)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ........... $208,360 $230,562 $268,969 $95,894 $115,999 $175,635
Ratios to average net assets:
Expenses ................................... 1.24%c 1.18% 1.19% 1.38% 1.27% 1.21%
Net investment income (loss) ............... (.20)%c (.02)% .46% .23% (.05)% (.11)%
Portfolio turnover rate ..................... 2.34% 28.35% 23.62% 8.52% 14.12% 31.91%

See notes to financial statements.

SEMIANNUAL REPORT 45

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED)

FRANKLIN MICROCAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS 96.6%
COMMERCIAL SERVICES 3.1%

Courier Corp. .................................................................. 104,200 $ 5,095,380
a RemedyTemp Inc., A ............................................................. 128,000 1,497,600
------------
6,592,980
------------
COMMUNICATIONS 1.9%
Atlantic Tele-Network Inc. ..................................................... 230,000 3,919,200
------------
CONSUMER DURABLES 5.0%
Allen Organ Co., B ............................................................. 94,800 3,463,518
a Baldwin Piano & Organ Co. ...................................................... 100 --
a Cavalier Homes Inc. ............................................................ 750,000 900,000
a Chromcraft Revington Inc. ...................................................... 200,000 2,208,000
Edelbrock Corp. ................................................................ 121,880 1,267,552
Flexsteel Industries Inc. ...................................................... 60,000 829,200
a National R.V. Holdings Inc. .................................................... 430,000 1,677,000
------------
10,345,270
------------
CONSUMER NON-DURABLES 14.5%
Brown Shoe Co. Inc. ............................................................ 165,000 4,822,950
b Delta Apparel Inc. ............................................................. 340,000 5,440,000
DIMON Inc. ..................................................................... 520,000 3,411,200
b Haggar Corp. ................................................................... 490,700 5,103,280
a,bSeneca Foods Corp., A ......................................................... 256,600 4,439,180
a Seneca Foods Corp., B .......................................................... 121,500 2,138,400
Standard Commercial Corp. ...................................................... 305,000 4,883,050
------------
30,238,060
------------
CONSUMER SERVICES .7%
a Garden Fresh Restaurant Corp. .................................................. 170,700 1,502,160
------------
DISTRIBUTION SERVICES .8%
a GTSI Corp. ..................................................................... 193,500 1,658,295
------------
ELECTRONIC TECHNOLOGY 2.8%
a,bECC International Corp. ....................................................... 500,000 2,235,000
b Espey Manufacturing & Electronics Corp. ........................................ 78,000 1,404,000
a Printronix Inc. ................................................................ 100,000 1,003,000
a Sparton Corp. .................................................................. 142,905 1,143,240
------------
5,785,240
------------
HEALTH SERVICES 1.1%
a Healthcare Services Group Inc. ................................................. 173,600 2,291,520
------------
HEALTH TECHNOLOGY 2.0%
a,bInvivo Corp. .................................................................. 280,000 4,284,000
------------
INDUSTRIAL SERVICES 6.8%
b Ecology & Environment Inc., A .................................................. 247,000 2,068,625
a Exponent Inc. .................................................................. 100,000 1,390,000
a,bLayne Christensen Co. ......................................................... 595,000 4,432,750
a Matrix Service Co. ............................................................. 310,000 3,933,900

46 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN MICROCAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
INDUSTRIAL SERVICES (CONT.)

a Petroleum Helicopters Inc. ..................................................... 17,600 $ 447,568
a Petroleum Helicopters Inc., non-voting ......................................... 78,000 1,942,200
------------
14,215,043
------------
NON-ENERGY MINERALS 3.0%
Case Pomeroy & Co. Inc., A ..................................................... 220 218,900
Case Pomeroy & Co. Inc., cvt., B ............................................... 500 495,000
Central Steel & Wire Co. ....................................................... 3,145 1,289,450
b Commonwealth Industries Inc. ................................................... 870,000 4,219,500
------------
6,222,850
------------
PROCESS INDUSTRIES 4.7%
a,bAmerican Pacific Corp. ........................................................ 680,000 5,256,400
a Griffin Land & Nurseries Inc. .................................................. 173,000 2,037,940
a Mercer International Inc. (Switzerland) ........................................ 545,400 2,508,840
------------
9,803,180
------------
PRODUCER MANUFACTURING 16.1%
a,bArt's-Way Manufacturing Co. Inc. .............................................. 134,500 488,907
CIRCOR International Inc. ...................................................... 244,000 3,989,400
a,bContinental Materials Corp. ................................................... 95,000 2,479,500
a,bGehl Co. ...................................................................... 332,500 2,826,250
Gibraltar Steel Corp. .......................................................... 238,000 4,117,400
b Hardinge Inc. .................................................................. 700,000 4,697,000
a Insteel Industries Inc. ........................................................ 250,000 170,000
Nam Tai Electronics Inc. ....................................................... 40,000 1,084,000
a,bNashua Corp. .................................................................. 450,000 3,993,750
a Northwest Pipe Co. ............................................................. 70,000 749,700
a Powell Industries Inc. ......................................................... 8,000 111,600
a Rofin-Sinar Technologies Inc. .................................................. 335,000 4,726,850
a RTI International Metals Inc. .................................................. 146,900 1,483,690
Smith Investment Co. ........................................................... 42,400 1,590,000
a TransPro Inc. .................................................................. 308,600 1,080,100
------------
33,588,147
------------
PROPERTY-CASUALTY INSURANCE 7.6%
a,bACMAT Corp., A ................................................................ 432,600 3,501,897
Baldwin & Lyons Inc., B ........................................................ 153,875 3,539,125
b Merchants Group Inc. ........................................................... 200,000 4,070,000
Penn-America Group Inc. ........................................................ 320,000 3,331,200
Safety Insurance Group Inc. .................................................... 95,000 1,325,250
------------
15,767,472
------------
REAL ESTATE DEVELOPMENT 1.9%
a Bresler & Reiner Inc. .......................................................... 89,000 3,931,575
------------
RETAIL TRADE 6.8%
a,bDuckwall-ALCO Stores Inc. ..................................................... 256,100 2,368,925
a The Elder-Beerman Stores Corp. ................................................. 520,000 1,508,000

SEMIANNUAL REPORT 47

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN MICROCAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
RETAIL TRADE (CONT.)

b Fresh Brands Inc. ............................................................. 264,000 $ 3,564,000
a,bS&K Famous Brands Inc. ........................................................ 280,000 2,903,600
a,bUnited Retail Group Inc. ...................................................... 878,800 1,291,836
a,bVillage Super Market Inc., A .................................................. 110,675 2,558,806
------------
14,195,167
------------
SAVINGS BANKS 5.9%
First Defiance Financial Corp. ................................................. 247,000 4,848,610
GA Financial Inc. .............................................................. 172,000 4,559,720
a Wilshire Financial Services Group Inc. ......................................... 736,500 2,817,113
------------
12,225,443
------------
TRANSPORTATION 8.7%
a,bAirnet System Inc. ............................................................ 592,600 1,232,608
a Crowley Maritime Corp. ......................................................... 2,342 2,722,575
a,bInternational Shipholding Corp. ............................................... 522,700 4,521,355
a OMI Corp. ...................................................................... 840,000 4,074,000
Providence & Worchester Railroad Co. ........................................... 205,000 1,383,750
a Stelmar Shipping Ltd. (Greece) ................................................. 275,000 4,171,750
------------
18,106,038
------------
UTILITIES 3.2%
Central Vermont Public Service Corp. ........................................... 70,000 1,238,300
Green Mountain Power Corp. ..................................................... 203,000 4,242,700
Maine Public Service Co. ....................................................... 39,000 1,189,500
------------
6,670,500
------------
TOTAL COMMON STOCKS (COST $180,505,675) ........................................ 201,342,140
------------
SHORT TERM INVESTMENT (COST $6,607,621) 3.2%
c Franklin Institutional Fiduciary Trust Money Market Portfolio .................. 6,607,621 6,607,621
------------

TOTAL INVESTMENTS (COST $187,113,296) 99.8% .................................... 207,949,761
OTHER ASSETS, LESS LIABILITIES .2% ............................................. 410,254
------------
NET ASSETS 100.0% .............................................................. $208,360,015
------------

<FN>
a Non-income producing
b See Note 7 regarding holdings of 5% voting securities.
c See Note 6 regarding investments in the Franklin Institutional Fiduciary
Trust Money Market Portfolio.
</FN>

See notes to financial statements.

48 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights

FRANKLIN SMALL CAP VALUE FUND
CLASS A
----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 -----------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
----------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ......... $22.15 $22.49 $20.86 $17.30 $17.98 $24.68
----------------------------------------------------------------
Income from investment operations:
Net investment income (loss) a .............. .01 .02 .09 .03 (.04) (.03)
Net realized and unrealized gains (losses) .. .73 (.33) 1.59 3.53 (.55) (6.45)
----------------------------------------------------------------
Total from investment operations ............. .74 (.31) 1.68 3.56 (.59) (6.48)
----------------------------------------------------------------
Less distributions from:
Net investment income ....................... -- -- (.05) -- -- (.01)
Net realized gains .......................... -- -- -- -- (.09) (.21)
Tax return of capital ....................... -- (.03) -- -- -- --
----------------------------------------------------------------
Total distributions .......................... -- (.03) (.05) -- (.09) (.22)
----------------------------------------------------------------
Net asset value, end of period ............... $22.89 $22.15 $22.49 $20.86 $17.30 $17.98
----------------------------------------------------------------
Total return b ............................... 3.34% (1.41)% 8.06% 20.72% (3.38)% (26.48)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $150,665 $140,202 $95,029 $64,513 $65,898 $98,288
Ratios to average net assets:
Expenses .................................... 1.41%c 1.37% 1.36% 1.58% 1.49% 1.32%
Expenses excluding waiver and payments by affiliate 1.41%c 1.37% 1.36% 1.58% 1.49% 1.38%
Net investment income (loss) ................ .07%c .09% .37% .16% (.23)% (.16)%
Portfolio turnover rate ...................... 5.79% 12.74% 43.33% 44.99% 41.21% 36.88%

SEMIANNUAL REPORT 49

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN SMALL CAP VALUE FUND (CONT.)
CLASS B
-------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ---------------------------------------
(UNAUDITED) 2002 2001 2000 1999 D
-------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ................. $21.67 $22.13 $20.61 $17.21 $18.33
-------------------------------------------------------
Income from investment operations:
Net investment income (loss) a ...................... (.06) (.14) (.07) (.09) (.15)
Net realized and unrealized gains (losses) .......... .72 (.32) 1.59 3.49 (.97)
-------------------------------------------------------
Total from investment operations ..................... .66 (.46) 1.52 3.40 (1.12)
-------------------------------------------------------
Less distributions from net investment income ........ -- -- --c -- --
-------------------------------------------------------
Net asset value, end of period ....................... $22.33 $21.67 $22.13 $20.61 $17.21
-------------------------------------------------------

Total return b ....................................... 3.05% (2.08)% 7.38% 19.97% (6.27)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................... $34,249 $29,535 $11,220 $2,747 $1,293
Ratios to average net assets:
Expenses ............................................ 2.06%e 2.02% 2.02% 2.22% 2.12%e
Net investment income (loss) ........................ (.58)%e (.56)% (.32)% (.47)% (.84)%e
Portfolio turnover rate .............................. 5.79% 12.74% 43.33% 44.99% 41.21%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is not
annualized for periods less than one year.
c The fund made a dividend distribution of $.002
d For the year January 1, 1999 (effective date) to October 31, 1999.
e Annualized
</FN>

50 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN SMALL CAP VALUE FUND (CONT.)
CLASS C
-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
-----------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ......... $21.46 $21.90 $20.40 $17.03 $17.82 $24.59
-----------------------------------------------------------------
Income from investment operations:
Net investment income (loss) a .............. (.07) (.13) (.07) (.09) (.16) (.13)
Net realized and unrealized gains (losses) .. .71 (.31) 1.57 3.46 (.54) (6.43)
-----------------------------------------------------------------
Total from investment operations ............. .64 (.44) 1.50 3.37 (.70) (6.56)
-----------------------------------------------------------------
Less distributions from net realized gains ... -- -- -- -- (.09) (.21)
-----------------------------------------------------------------
Net asset value, end of period ............... $22.10 $21.46 $21.90 $20.40 $17.03 $17.82
-----------------------------------------------------------------
Total return b ............................... 2.98% (2.01)% 7.35% 19.93% (4.03)% (26.93)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $85,329 $81,186 $51,313 $28,555 $30,133 $41,694
Ratios to average net assets:
Expenses .................................... 2.08%c 1.99% 2.01% 2.24% 2.17% 1.97%
Expenses excluding waiver and payments by affiliate 2.08%c 1.99% 2.01% 2.24% 2.17% 2.03%
Net investment income (loss) ................ (.60)%c (.53)% (.29)% (.51)% (.91)% (.81)%
Portfolio turnover rate ...................... 5.79% 12.74% 43.33% 44.99% 41.21% 36.88%

SEMIANNUAL REPORT 51

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN SMALL CAP VALUE FUND (CONT.)
CLASS R
------------------------------------
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2002 C
------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ................. $22.14 $23.34
------------------------------------
Income from investment operations:
Net investment income (loss) a ...................... (.01) (.04)
Net realized and unrealized gains (losses) .......... .73 (1.16)
------------------------------------
Total from investment operations ..................... .72 (1.20)
------------------------------------
Net asset value, end of period ....................... $22.86 $22.14
------------------------------------

Total return b ....................................... 3.25% (5.14)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................... $3,472 $1,097
Ratios to average net assets:
Expenses ............................................ 1.56%d 1.52%d
Net investment income (loss) ........................ (.08)%d (.06)%d
Portfolio turnover rate .............................. 5.79% 12.74%

<FN>
a Based on average shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is
not annualized for periods less than one year.
c For the period August 1, 2002 (effective date) to October 31, 2002.
d Annualized
</FN>

52 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Highlights (CONTINUED)

FRANKLIN SMALL CAP VALUE FUND (CONT.)
ADVISOR CLASS
-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
-----------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ......... $22.53 $22.82 $21.13 $17.46 $18.07 $24.72
-----------------------------------------------------------------
Income from investment operations:
Net investment income a ..................... .05 .10 .17 .09 .01 .04
Net realized and unrealized gains (losses) .. .75 (.34) 1.62 3.58 (.53) (6.45)
-----------------------------------------------------------------
Total from investment operations ............. .80 (.24) 1.79 3.67 (.52) (6.41)
-----------------------------------------------------------------
Less distributions from:
Net investment income ....................... -- -- (.10) -- -- (.03)
Net realized gains .......................... -- -- -- -- (.09) (.21)
Tax return of capital ....................... -- (.05) -- -- -- --
-----------------------------------------------------------------
Total distributions .......................... -- (.05) (.10) -- (.09) (.24)
-----------------------------------------------------------------
Net asset value, end of period ............... $23.33 $22.53 $22.82 $21.13 $17.46 $18.07
-----------------------------------------------------------------

Total return b ............................... 3.55% (1.07)% 8.43% 21.16% (2.97)% (26.18)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $9,412 $9,586 $4,622 $3,848 $2,941 $4,739
Ratios to average net assets:
Expenses .................................... 1.06%c 1.02% 1.02% 1.24% 1.17% .97%
Expenses excluding waiver and payments by affiliate 1.06%c 1.02% 1.02% 1.24% 1.17% 1.03%
Net investment income ....................... .42%c .44% .70% .49% .09% .19%
Portfolio turnover rate ...................... 5.79% 12.74% 43.33% 44.99% 41.21% 36.88%

<FN>
a Based on average shares outstanding effective year ended October 31, 1999.
b Total return is not annualized for periods less than one year.
c Annualized
</FN>

See notes to financial statements.

SEMIANNUAL REPORT 53

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED)

FRANKLIN SMALL CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
CLOSED END MUTUAL FUNDS 1.3%

High Income Opportunity Fund .................................................... 206,000 $ 1,458,480
High Yield Income Fund Inc. ..................................................... 116,800 680,944
Managed High Income Portfolio Inc. .............................................. 210,000 1,499,400
------------
TOTAL CLOSED END MUTUAL FUNDS (COST $4,586,854) ................................. 3,638,824
------------
COMMON STOCKS 95.7%
COMMERCIAL SERVICES .4%
ABM Industries Inc. ............................................................. 90,000 1,246,500
------------
CONSUMER DURABLES 8.3%
Action Performance Cos. Inc. .................................................... 155,000 2,865,950
Briggs & Stratton Corp. ......................................................... 77,000 3,475,780
Clayton Homes Inc. .............................................................. 233,900 2,902,699
D.R. Horton Inc. ................................................................ 37,500 888,750
La-Z-Boy Inc. ................................................................... 140,000 2,734,200
M/I Schottenstein Homes Inc. .................................................... 17,000 580,720
aMonaco Coach Corp. .............................................................. 251,000 3,393,520
Russ Berrie & Co. Inc. .......................................................... 200,000 6,576,000
------------
23,417,619
------------
CONSUMER NON-DURABLES 5.7%
Brown Shoe Co. Inc. ............................................................. 180,200 5,267,246
Oshkosh B'Gosh Inc., A .......................................................... 3,700 112,406
Standard Commercial Corp. ....................................................... 129,000 2,065,290
aTimberland Co., A ............................................................... 107,000 5,348,930
aTommy Hilfiger Corp. ............................................................ 319,400 2,625,468
Wolverine World Wide Inc. ....................................................... 44,500 820,580
------------
16,239,920
------------
CONSUMER SERVICES 2.2%
aAztar Corp. ..................................................................... 290,000 4,129,600
Intrawest Corp. (Canada) ........................................................ 185,000 2,157,100
------------
6,286,700
------------
ELECTRONIC TECHNOLOGY 5.2%
aAvocent Corp. ................................................................... 235,000 6,960,700
Cohu Inc. ....................................................................... 136,000 2,449,360
Diebold Inc. .................................................................... 127,000 5,077,460
aSPACEHAB Inc. ................................................................... 123,000 132,348
------------
14,619,868
------------
ENERGY MINERALS 8.2%
Arch Coal Inc. .................................................................. 250,000 4,520,000
Consol Energy Inc. .............................................................. 310,000 5,332,000
Holly Corp. ..................................................................... 45,000 1,282,050
aNuevo Energy Co. ................................................................ 249,400 3,341,960
Peabody Energy Corp. ............................................................ 210,000 5,901,000
aPioneer Natural Resources Co. ................................................... 115,000 2,750,800
------------
23,127,810
------------

54 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN SMALL CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
FINANCE 4.7%

Arthur J. Gallagher & Co. ....................................................... 130,000 $ 3,248,700
Hancock Holding Co. ............................................................. 55,500 2,511,375
Harleysville Group Inc. ......................................................... 117,000 2,761,200
RLI Corp. ....................................................................... 162,100 4,790,055
------------
13,311,330
------------
FINANCIAL CONGLOMERATES 5.8%
American National Insurance Co. ................................................. 46,000 3,680,000
1st Source Corp. ................................................................ 63,500 841,375
First Indiana Corp. ............................................................. 36,500 608,820
IPC Holdings Ltd. (Bermuda) ..................................................... 115,000 3,950,250
Peoples Bancorp Inc. ............................................................ 99,000 2,281,950
Presidential Life Corp. ......................................................... 330,000 2,666,400
StanCorp Financial Group Inc. ................................................... 45,000 2,416,500
------------
16,445,295
------------
HEALTH TECHNOLOGY 1.3%
ICN Pharmaceuticals Inc. ........................................................ 125,000 1,093,750
West Pharmaceutical Services Inc. ............................................... 109,000 2,599,650
------------
3,693,400
------------
INDUSTRIAL SERVICES 6.3%
aAtwood Oceanics Inc. ............................................................ 88,000 2,292,400
ENSCO International Inc. ........................................................ 87,000 2,209,800
aGlobal Industries Ltd. .......................................................... 565,000 2,508,600
GlobalSantaFe Corp. ............................................................. 62,000 1,311,920
aOffshore Logistics Inc. ......................................................... 147,000 2,793,000
aOil States International Inc. ................................................... 258,000 2,936,040
Rowan Cos. Inc. ................................................................. 143,000 2,931,500
aTransocean Inc. ................................................................. 44,500 847,725
------------
17,830,985
------------
NON-ENERGY MINERALS 2.5%
Reliance Steel & Aluminum Co. ................................................... 234,500 3,986,500
United States Steel Corp. ....................................................... 225,000 3,222,000
------------
7,208,500
------------
PROCESS INDUSTRIES 7.6%
AptarGroup Inc. ................................................................. 126,000 4,336,920
Bunge Ltd. ...................................................................... 203,000 5,686,030
Cabot Corp. ..................................................................... 59,000 1,644,330
Myers Industries Inc. ........................................................... 268,000 2,690,720
Olin Corp. ...................................................................... 187,000 3,388,440
RPM International Inc. .......................................................... 310,000 3,831,600
------------
21,578,040
------------

SEMIANNUAL REPORT 55

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN SMALL CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
PRODUCER MANUFACTURING 20.6%

American Woodmark Corp. ......................................................... 6,400 $ 306,880
aCable Design Technologies Corp. ................................................. 242,100 1,672,911
Carlisle Cos. Inc. .............................................................. 32,000 1,451,520
CIRCOR International Inc. ....................................................... 162,000 2,648,700
CNH Global NV (Netherlands) ..................................................... 174,000 1,519,020
aGenlyte Group Inc. .............................................................. 71,000 2,678,120
Graco Inc. ...................................................................... 180,600 5,544,420
JLG Industries Inc. ............................................................. 237,400 1,291,456
Lancaster Colony Corp. .......................................................... 60,000 2,563,800
aLone Star Technologies Inc. ..................................................... 203,000 4,309,690
aMettler-Toledo International Inc. (Switzerland) ................................. 165,000 5,857,500
aMueller Industries Inc. ......................................................... 105,000 2,682,750
aPowell Industries Inc. .......................................................... 88,000 1,227,600
Roper Industries Inc. ........................................................... 136,000 4,160,240
Stewart & Stevenson Services Inc. ............................................... 225,000 3,017,250
Superior Industries International Inc. .......................................... 89,000 3,520,840
Teleflex Inc. ................................................................... 70,000 2,687,300
Thomas Industries Inc. .......................................................... 80,000 2,152,000
Timken Co. ...................................................................... 69,600 1,231,920
aTower Automotive Inc. ........................................................... 165,800 464,240
Watts Industries Inc., A ........................................................ 150,000 2,452,500
York International Corp. ........................................................ 200,000 4,780,000
------------
58,220,657
------------
RETAIL TRADE 4.9%
aAmerican Eagle Outfitters Inc. .................................................. 170,000 2,975,000
Dillards Inc., A ................................................................ 160,000 2,236,800
Fresh Brands Inc. ............................................................... 63,500 857,250
aLinens `n Things Inc. ........................................................... 165,000 3,496,350
aThe Men's Wearhouse Inc. ........................................................ 180,000 2,997,000
aWest Marine Inc. ................................................................ 30,100 491,834
aZale Corp. ...................................................................... 23,100 807,114
------------
13,861,348
------------
TECHNOLOGY SERVICES 2.0%
aNetIQ Corp. ..................................................................... 182,500 2,514,850
Reynolds & Reynolds Co., A ...................................................... 105,000 3,025,050
------------
5,539,900
------------

56 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
STATEMENT OF INVESTMENTS, APRIL 30, 2003 (UNAUDITED) (CONT.)

FRANKLIN SMALL CAP VALUE FUND SHARES VALUE
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
TRANSPORTATION 9.5%

Airborne Inc. ................................................................... 125,000 $ 2,482,500
aAtlantic Coast Airlines Holdings Inc. ........................................... 342,500 2,859,875
aDollar Thrifty Automotive Group Inc. ............................................ 140,000 2,297,400
aMidwest Express Holdings Inc. ................................................... 340,000 992,800
aOMI Corp. ....................................................................... 880,000 4,268,000
Overseas Shipholding Group Inc. ................................................. 147,000 2,765,070
SkyWest Inc. .................................................................... 275,000 3,517,250
Teekay Shipping Corp. (Bahamas) ................................................. 138,700 5,263,665
Tidewater Inc. .................................................................. 95,000 2,555,500
------------
27,002,060
------------
UTILITIES .5%
aSierra Pacific Resources ........................................................ 365,000 1,346,850
------------
TOTAL COMMON STOCKS (COST $290,883,490) ......................................... 270,976,782
------------

PRINCIPAL
AMOUNT
---------
CORPORATE BOND (COST $301,273)
bHechinger Co., 6.95%, 10/15/03 .................................................. $ 500,000 12,500
------------
TOTAL LONG TERM INVESTMENTS (COST $295,771,617) ................................. 274,628,106
------------

SHARES
---------
SHORT TERM INVESTMENT (COST $8,040,582) 2.8%
cFranklin Institutional Fiduciary Trust Money Market Portfolio ................... 8,040,582 8,040,582
------------
TOTAL INVESTMENTS (COST $303,812,199) 99.8% ..................................... 282,668,688
OTHER ASSETS, LESS LIABILITIES .2% .............................................. 456,904
------------
NET ASSETS 100.0% ............................................................... $283,125,592
------------

<FN>
a Non-income producing
b The Fund discontinues accruing income on defaulted bonds and provides an
estimate for losses on interest receivable.
c See Note 6 regarding investments in the Franklin Institutional Fiduciary
Trust Money Market Portfolio.
</FN>

See notes to financial statements.

SEMIANNUAL REPORT 57

RANKLIN VALUE INVESTORS TRUST
Financial Statements

STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2003 (UNAUDITED)

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
-----------------------------------------------------------
Assets:
Investments in securities:

Cost - Unaffiliated issuers ............... $1,721,108,858 $67,178,252 $106,298,815 $303,812,199
Cost - Non-controlled affiliated issuers .. 185,204,141 -- 80,814,481 --
-----------------------------------------------------------
Value - Unaffiliated issuers .............. 1,857,123,057 63,929,450 128,568,592 282,668,688
Value - Non-controlled affiliated issuers . 184,694,592 -- 79,381,169 --
Repurchase agreements, at value and cost ... 651,591,613 -- -- --
Receivables:
Investment securities sold ................ 2,491,444 265,345 873,233 546,070
Capital shares sold ....................... 4,014,629 401,322 116,628 943,098
Dividends and interest .................... 941,229 73,375 15,400 86,979
Other assets ............................... 85,600 -- 56,500 --
-----------------------------------------------------------
Total assets .......................... 2,700,942,164 64,669,492 209,011,522 284,244,835
-----------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased ........... 8,794,569 -- -- 214,707
Capital shares redeemed ................... 7,104,106 97,654 377,707 458,125
Affiliates ................................ 2,040,824 92,914 199,986 400,174
Shareholders .............................. 166,703 27,474 36,715 45,247
Unaffiliated transfer agent fees .......... 482,284 -- 18,147 --
Other liabilities .......................... 81,134 4,835 18,952 990
-----------------------------------------------------------
Total liabilities ..................... 18,669,620 222,877 651,507 1,119,243
-----------------------------------------------------------
Net assets, at value ................. $2,682,272,544 $64,446,615 $208,360,015 $283,125,592
-----------------------------------------------------------
Net assets consist of:
Undistributed net investment income ........ $ (2,050,084) $ 51,335 $ (177,734) $ (276,949)
Net unrealized appreciation (depreciation) . 135,504,650 (3,248,802) 20,836,465 (21,143,511)
Accumulated net realized gain (loss) ....... (4,397,728) (2,647,222) 425,647 (26,305,926)
Capital shares ............................. 2,553,215,706 70,291,304 187,275,637 330,851,978
-----------------------------------------------------------
Net assets, at value ................. $2,682,272,544 $64,446,615 $208,360,015 $283,125,592
-----------------------------------------------------------

See notes to financial statements.

58 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Statements (CONTINUED)

STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
APRIL 30, 2003 (UNAUDITED)

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
----------------------------------------------------------
CLASS A:

Net assets, at value ......................... $2,457,402,505 $36,985,605 $208,360,015 $150,664,774
----------------------------------------------------------
Shares outstanding ........................... 65,718,442 3,421,598 8,887,173 6,581,988
----------------------------------------------------------
Net asset value per share a .................. $37.39 $10.81 $23.45 $22.89
----------------------------------------------------------
Maximum offering price per share
(net asset value per share (DIVIDE) 94.25%) .. $39.67 $11.47 $24.88 $24.29
----------------------------------------------------------

CLASS B:
Net assets, at value ......................... $ 87,709,789 $ 5,792,808 -- $ 34,249,004
----------------------------------------------------------
Shares outstanding ........................... 2,362,957 538,973 -- 1,533,942
----------------------------------------------------------
Net asset value and maximum offering price
per share a ................................. $37.12 $10.75 -- $22.33
----------------------------------------------------------

CLASS C:
Net assets, at value ......................... $ 111,024,914 $21,376,324 -- $ 85,328,665
----------------------------------------------------------
Shares outstanding ........................... 2,988,048 1,990,041 -- 3,860,845
----------------------------------------------------------
Net asset value per share a .................. $37.16 $10.74 -- $22.10
----------------------------------------------------------
Maximum offering price per share
(net asset value per share (DIVIDE) 99%) ..... $37.54 $10.85 -- $22.32
----------------------------------------------------------

CLASS R:
Net assets, at value ......................... $ 9,130,705 $ 291,878 -- $ 3,471,563
----------------------------------------------------------
Shares outstanding ........................... 244,769 27,086 -- 151,882
----------------------------------------------------------
Net asset value and maximum offering price
per share a ................................. $37.30 $10.78 -- $22.86
----------------------------------------------------------

ADVISOR CLASS:
Net assets, at value ......................... $ 17,004,631 -- -- $ 9,411,586
----------------------------------------------------------
Shares outstanding ........................... 454,608 -- -- 403,467
----------------------------------------------------------
Net asset value and maximum offering price
per share ................................... $37.41 -- -- $23.33
----------------------------------------------------------

<FN>
a Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
</FN>

See notes to financial statements.

SEMIANNUAL REPORT 59

FRANKLIN VALUE INVESTORS TRUST
Financial Statements (CONTINUED)

STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)

Unaffiliated issuers .............................. $14,018,337 $ 605,230 $ 805,592 $ 1,957,136
Non-controlled affiliated issuers (Note 7) ........ 1,091,024 -- 419,993 --
Interest ........................................... 3,999,766 -- -- 25,267
---------------------------------------------------
Total investment income ....................... 19,109,127 605,230 1,225,585 1,982,403
---------------------------------------------------
Expenses:
Management fees (Note 3) ........................... 5,633,931 150,469 833,068 992,716
Administrative fees (Note 3) ....................... -- 58,580 -- --
Distribution fees (Note 3)
Class A ........................................... 2,928,160 59,914 282,887 250,745
Class B ........................................... 431,630 26,315 -- 156,189
Class C ........................................... 554,006 97,383 -- 428,573
Class R ........................................... 20,922 398 -- 6,221
Transfer agent fees (Note 3) ....................... 2,950,974 53,920 224,063 338,112
Custodian fees ..................................... 14,690 263 1,270 1,213
Reports to shareholders ............................ 67,837 6,989 17,278 16,201
Registration and filing fees ....................... 188,674 30,151 16,167 44,226
Professional fees .................................. 43,350 9,343 16,976 15,365
Trustees' fees and expenses ........................ 60,119 373 7,378 6,163
Other .............................................. 30,296 1,369 4,232 3,628
---------------------------------------------------
Total expenses ................................ 12,924,589 495,467 1,403,319 2,259,352
---------------------------------------------------
Net investment income (loss) ................. 6,184,538 109,763 (177,734) (276,949)
---------------------------------------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments
Unaffiliated issuers ............................. (4,433,838) (1,021,530) 833,205 (4,057,565)
Non-controlled affiliated issuers (Note 7) ....... (8,297,745) -- (183,365) --
Closed end funds distributions ................... 2,377,174 -- -- --
Foreign currency transactions ..................... 2,351 -- -- --
---------------------------------------------------
Net realized gain (loss) ..................... (10,352,058) (1,021,530) 649,840 (4,057,565)
Net unrealized appreciation (depreciation)
on investments ................................... 65,154,584 3,007,989 6,926,739 12,468,452
---------------------------------------------------
Net realized and unrealized gain (loss) ............. 54,802,526 1,986,459 7,576,579 8,410,887
---------------------------------------------------
Net increase (decrease) in net assets resulting
from operations ................................... $60,987,064 $2,096,222 $7,398,845 $ 8,133,938
---------------------------------------------------

See notes to financial statements.

60 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Statements (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
AND THE YEAR ENDED OCTOBER 31, 2002

FRANKLIN BALANCE SHEET INVESTMENT FUND FRANKLIN LARGE CAP VALUE FUND
----------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, 2002 APRIL 30, 2003 OCTOBER 31, 2002
-----------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:

Net investment income (loss) ........... $ 6,184,538 $ 13,972,003 $ 109,763 $ 204,126
Net realized gain (loss) from investments
and foreign currency transactions ..... (10,352,058) 30,145,934 (1,021,530) (1,617,513)
Net unrealized appreciation (depreciation)
on investments ........................ 65,154,584 (117,728,341) 3,007,989 (5,833,769)
--------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ......... 60,987,064 (73,610,404) 2,096,222 (7,247,156)
Distributions to shareholders from:
Net investment income:
Class A ............................... (15,859,667) (7,078,917) (219,664) (155,176)
Class B ............................... (12,389) (69,151) (2,700) (5,806)
Class C ............................... (224) (89,632) (25,501) (15,081)
Class R ............................... (48,332) (1,483) (609) --
Advisor Class ......................... (136,670) (6,612) -- --
Net realized gains:
Class A ............................... (16,010,960) (49,569,027) -- (210,973)
Class B ............................... (608,470) (920,168) -- (30,457)
Class C ............................... (796,029) (1,266,468) -- (101,418)
Class R ............................... (60,002) -- -- --
Advisor Class ......................... (104,241) (28,156) -- --
--------------------------------------------------------------
Total distributions to shareholders ..... (33,636,984) (59,029,614) (248,474) (518,911)

See notes to financial statements.

SEMIANNUAL REPORT 61

FRANKLIN VALUE INVESTORS TRUST
Financial Statements (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
AND THE YEAR ENDED OCTOBER 31, 2002

FRANKLIN BALANCE SHEET INVESTMENT FUND FRANKLIN LARGE CAP VALUE FUND
-----------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, 2002 APRIL 30, 2003 OCTOBER 31, 2002
-----------------------------------------------------------------------
Capital share transactions: (Note 2)

Class A ............................... $ 98,729,886 $ 951,100,027 $ 3,141,317 $13,864,084
Class B ............................... (2,538,920) 77,220,210 638,029 2,375,667
Class C ............................... (8,458,985) 100,100,704 3,011,135 9,621,016
Class R ............................... 1,287,486 8,671,892 204,602 65,313
Advisor Class ......................... 1,633,260 16,885,865 -- --
--------------------------------------------------------------
Total capital share transactions ........ 90,652,727 1,153,978,698 6,995,083 25,926,080
Net increase (decrease) in net assets .... 118,002,807 1,021,338,680 8,842,831 18,160,013
Net assets:
Beginning of period ..................... 2,564,269,737 1,542,931,057 55,603,784 37,443,771
--------------------------------------------------------------
End of period ........................... $2,682,272,544 $2,564,269,737 $64,446,615 $55,603,784
--------------------------------------------------------------
Undistributed net investment income included
in net assets:
End of period .......................... $ (2,050,084) $ 7,822,660 $ 51,335 $ 190,046
--------------------------------------------------------------

See notes to financial statements.

62 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Financial Statements (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
AND THE YEAR ENDED OCTOBER 31, 2002

FRANKLIN MICROCAP VALUE FUND FRANKLIN SMALL CAP VALUE FUND
-----------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, 2002 APRIL 30, 2003 OCTOBER 31, 2002
-----------------------------------------------------------------
Increase (decrease) in net assets:
Operations:

Net investment income (loss) ........... $ (177,734) $ (60,578) $ (276,949) $ (355,176)
Net realized gain (loss) from investments 649,840 17,438,766 (4,057,565) (2,418,283)
Net unrealized appreciation (depreciation)
on investments ........................ 6,926,739 (8,779,224) 12,468,452 (23,073,577)
-----------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ........... 7,398,845 8,598,964 8,133,938 (25,847,036)
Distributions to shareholders from:
Net investment income:
Class A ............................... -- (861,539) -- --
Net realized gains:
Class A ............................... (13,669,357) (11,780,291) -- --
Tax return of capital:
Class A ............................... -- -- -- (116,877)
Advisor Class ......................... -- -- -- (11,812)
-----------------------------------------------------------------
Total distributions to shareholders ..... (13,669,357) (12,641,830) -- (128,689)
Capital share transactions: (Note 2)
Class A ............................... (15,931,972) (34,363,479) 5,981,712 58,390,038
Class B ............................... -- -- 3,783,898 22,495,635
Class C ............................... -- -- 1,895,006 37,439,975
Class R ............................... -- -- 2,295,224 1,104,926
Advisor Class ......................... -- -- (569,581) 5,965,488
-----------------------------------------------------------------
Total capital share transactions ........ (15,931,972) (34,363,479) 13,386,259 125,396,062
Net increase (decrease) in net assets (22,202,484) (38,406,345) 21,520,197 99,420,337
Net assets:
Beginning of period ..................... 230,562,499 268,968,844 261,605,395 162,185,058
-----------------------------------------------------------------
End of period ........................... $208,360,015 $230,562,499 $283,125,592 $261,605,395
-----------------------------------------------------------------
Undistributed net investment income included in
net assets:
End of period .......................... $ (177,734) $ -- $ (276,949) $ --
-----------------------------------------------------------------

See notes to financial statements.

SEMIANNUAL REPORT 63

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Value Investors Trust (the Trust) is registered under the Investment
Company Act of 1940 as an open-end investment company, consisting of four series
(the Funds). All Funds are non-diversified except the Franklin Large Cap Value
Fund. The Funds' investment objectives are growth and income.

The following summarizes the Funds' significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the last quoted bid and asked prices. Securities for which market quotations are
not readily available are valued at fair value as determined by management in
accordance with procedures established by the Board of Trustees.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.

The Funds do not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

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. JOINT REPURCHASE AGREEMENT

The Funds may enter into a joint repurchase agreement whereby their uninvested
cash balance is deposited into a joint cash account to be used to invest in one
or more repurchase agreements. The value and face amount of the joint repurchase
agreement are allocated to the Funds based on their pro-rata interest. A
repurchase agreement is accounted for as a loan by the Fund to the seller,
collateralized by securities which are delivered to the Fund's custodian. The
market value, including accrued interest, of the initial collateralization is
required to be at least 102% of the dollar amount invested by the Fund, with the
value of the underlying securities marked to market daily to maintain coverage
of at least 100%. At April 30, 2003, all repurchase agreements had been entered
into on that date.

64 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)

D. INCOME TAXES

No provision has been made for income taxes because each Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.

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. Dividend income and
distributions to shareholders are recorded on the ex-dividend date.

Common expenses incurred by the Trust are allocated among the Funds based on the
ratio of net assets of each Fund to the combined net assets. Other expenses are
charged to each Fund on a specific identification basis.

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.

F. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

G. GUARANTEES AND INDEMNIFICATIONS

In the normal course of business the Funds enter into contracts with service
providers that contain general indemnification clauses. The Funds' maximum
exposure under these arrangements is unknown as this would involve future claims
that may be made against the Funds that have not yet occurred. However, based on
experience, the Funds expect the risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

The classes of shares offered within each of the Funds are indicated below. 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.

CLASS A, CLASS B, CLASS C, CLASS R
CLASS A CLASS A, CLASS B, CLASS C, & CLASS R & ADVISOR CLASS
- ------------------------------------------------------------------------------------------------------------------

Franklin MicroCap Value Fund Franklin Large Cap Value Fund Franklin Balance Sheet Investment Fund
Franklin Small Cap Value Fund

SEMIANNUAL REPORT 65

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONT.)

At April 30, 2003, there were an unlimited number of shares authorized ($.01 par
value). Transactions in the Funds' shares were as follows:

FRANKLIN BALANCE FRANKLIN LARGE CAP
SHEET INVESTMENT FUND VALUE FUND
----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------
CLASS A SHARES:
Six months ended April 30, 2003

Shares sold ..................................... 10,372,503 $ 379,291,481 785,588 $ 8,303,467
Shares issued in reinvestment of distributions .. 778,906 28,920,770 17,273 182,921
Shares redeemed ................................. (8,489,563) (309,482,365) (514,280) (5,345,071)
----------------------------------------------------------
Net increase (decrease) ......................... 2,661,846 $ 98,729,886 288,581 $ 3,141,317
----------------------------------------------------------
Year ended October 31, 2002
Shares sold ..................................... 38,685,312 $1,575,410,983 2,184,193 $25,756,549
Shares issued in reinvestment of distributions .. 1,327,957 51,840,208 24,451 293,655
Shares redeemed ................................. (17,038,659) (676,151,164) (1,094,478) (12,186,120)
----------------------------------------------------------
Net increase (decrease) ......................... 22,974,610 $ 951,100,027 1,114,166 $13,864,084
----------------------------------------------------------
CLASS B SHARES:
Six months ended April 30, 2003
Shares sold ..................................... 74,172 $ 2,694,220 142,817 $ 1,489,136
Shares issued in reinvestment of distributions .. 15,648 578,344 210 2,213
Shares redeemed ................................. (162,466) (5,811,484) (82,932) (853,320)
----------------------------------------------------------
Net increase (decrease) ......................... (72,646) $ (2,538,920) 60,095 $ 638,029
----------------------------------------------------------
Year ended October 31, 2002
Shares sold ..................................... 2,107,279 $ 86,324,468 289,903 $ 3,414,959
Shares issued in reinvestment of distributions .. 23,278 903,754 2,310 27,646
Shares redeemed ................................. (261,449) (10,008,012) (94,061) (1,066,938)
----------------------------------------------------------
Net increase (decrease) ......................... 1,869,108 $ 77,220,210 198,152 $ 2,375,667
----------------------------------------------------------
CLASS C SHARES:
Six months ended April 30, 2003
Shares sold ..................................... 115,112 $ 4,180,405 619,025 $ 6,467,146
Shares issued in reinvestment of distribution ... 19,810 732,949 2,084 21,989
Shares redeemed ................................. (370,667) (13,372,339) (337,583) (3,478,000)
----------------------------------------------------------
Net increase (decrease) ......................... (235,745) $ (8,458,985) 283,526 $ 3,011,135
----------------------------------------------------------
Year ended October 31, 2002
Shares sold ..................................... 2,832,198 $ 116,149,306 1,170,025 $13,799,522
Shares issued in reinvestment of distributions .. 32,442 1,260,427 8,984 107,535
Shares redeemed ................................. (448,136) (17,309,029) (392,477) (4,286,041)
----------------------------------------------------------
Net increase (decrease) ......................... 2,416,504 $ 100,100,704 786,532 $ 9,621,016
----------------------------------------------------------

66 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONT.)

FRANKLIN BALANCE FRANKLIN LARGE CAP
SHEET INVESTMENT FUND VALUE FUND
---------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------
CLASS R SHARES:
Six months ended April 30, 2003

Shares sold ........................................ 72,037 $ 2,646,108 32,824 $ 330,665
Shares issued in reinvestment of distributions ..... 2,908 107,759 50 521
Shares redeemed .................................... (40,194) (1,466,381) (12,023) (126,584)
---------------------------------------------------
Net increase (decrease) ............................ 34,751 $ 1,287,486 20,851 $ 204,602
---------------------------------------------------
Year ended October 31, 2002 a
Shares sold ........................................ 259,417 $10,603,936 6,235 $ 65,313
Shares issued in reinvestment of distributions ..... 35 1,469 -- --
Shares redeemed .................................... (49,434) (1,933,513) -- --
---------------------------------------------------
Net increase (decrease) ............................ 210,018 $ 8,671,892 6,235 $ 65,313
---------------------------------------------------
ADVISOR CLASS SHARES:
Six months ended April 30, 2003
Shares sold ........................................ 82,290 $ 2,989,580
Shares issued in reinvestment of distributions ..... 3,674 136,339
Shares redeemed .................................... (41,297) (1,492,659)
-----------------------
Net increase (decrease) ............................ 44,667 $ 1,633,260
-----------------------
Year ended October 31, 2002
Shares sold ........................................ 435,466 $18,532,784
Shares issued in reinvestment of distributions ..... 859 33,612
Shares redeemed .................................... (41,732) (1,680,531)
-----------------------
Net increase (decrease) ............................ 394,593 $16,885,865
-----------------------

FRANKLIN MICROCAP FRANKLIN SMALL CAP
VALUE FUND VALUE FUND
-----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------
CLASS A SHARES:
Six months ended April 30, 2003
Shares sold ........................................ 661,855 $ 15,879,969 1,428,334 $31,800,107
Shares issued in reinvestment of distributions ..... 520,400 12,317,862 -- --
Shares redeemed ....................................(1,866,227) (44,129,803) (1,175,594) (25,818,395)
------------------------------------------------------
Net increase (decrease) ............................ (683,972) $ (15,931,972) 252,740 $ 5,981,712
------------------------------------------------------
Year ended October 31, 2002
Shares sold ........................................ 4,231,090 $ 107,810,709 5,083,372 $132,849,233
Shares issued in reinvestment of distributions ..... 458,924 10,927,121 4,092 103,439
Shares redeemed ....................................(6,033,298) (153,101,309) (2,984,302) (74,562,634)
------------------------------------------------------
Net increase (decrease) ............................(1,343,284) $ (34,363,479) 2,103,162 $ 58,390,038
------------------------------------------------------

<FN>
a For the Franklin Balance Sheet Investment Fund and the Franklin Large Cap Value
Fund, for the period January 1, 2002 (effective date) to October 31, 2002, and
August 1, 2002 (effective date) to October 31, 2002, respectively.
</FN>

SEMIANNUAL REPORT 67

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONT.)

FRANKLIN SMALL CAP
VALUE FUND
--------------------------
SHARES AMOUNT
--------------------------
CLASS B SHARES:
Six months ended April 30, 2003

Shares sold ........................................... 330,953 $ 7,161,849
Shares redeemed ....................................... (159,661) (3,377,951)
--------------------------
Net increase (decrease) ............................... 171,292 $ 3,783,898
--------------------------
Year ended October 31, 2002
Shares sold ........................................... 1,175,097 $ 30,003,089
Shares redeemed ....................................... (319,533) (7,507,454)
--------------------------
Net increase (decrease) ............................... 855,564 $ 22,495,635
--------------------------
CLASS C SHARES:
Six months ended April 30, 2003
Shares sold ........................................... 654,441 $ 14,091,151
Shares redeemed ....................................... (576,495) (12,196,145)
--------------------------
Net increase (decrease) ............................... 77,946 $ 1,895,006
--------------------------
Year ended October 31, 2002
Shares sold ........................................... 2,449,061 $ 61,628,044
Shares redeemed ....................................... (1,009,398) (24,188,069)
--------------------------
Net increase (decrease) ............................... 1,439,663 $ 37,439,975
--------------------------
CLASS R SHARES:
Six months ended April 30, 2003
Shares sold ........................................... 118,183 $ 2,638,004
Shares redeemed ....................................... (15,844) (342,780)
--------------------------
Net increase (decrease) ............................... 102,339 $ 2,295,224
--------------------------
Year ended October 31, 2002 b
Shares sold ........................................... 49,629 $ 1,106,802
Shares redeemed ....................................... (86) (1,876)
--------------------------
Net increase (decrease) ............................... 49,543 $ 1,104,926
--------------------------
ADVISOR CLASS SHARES:
Six months ended April 30, 2003
Shares sold ........................................... 61,878 $ 1,386,013
Shares redeemed ....................................... (83,784) (1,955,594)
--------------------------
Net increase (decrease) ............................... (21,906) $ (569,581)
--------------------------
Year ended October 31, 2002
Shares sold ........................................... 293,953 $ 7,769,844
Shares issued in reinvestment of distributions ........ 410 10,656
Shares redeemed ....................................... (71,566) (1,815,012)
--------------------------
Net increase (decrease) ............................... 222,797 $ 5,965,488
--------------------------

<FN>
b For the period August 1, 2002 (effective date) to October 31, 2002.
</FN>

68 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES

Certain officers and trustees of the Trust are also officers and/or directors of
Franklin Advisory Services, LLC (Advisory Services), Franklin/Templeton
Distributors, Inc. (Distributors), Franklin Templeton Services, LLC (FT
Services), and Franklin/Templeton Investor Services, LLC (Investor Services),
the Funds' investment manager, principal underwriter, administrative manager,
and transfer agent, respectively.

The Franklin Balance Sheet Investment Fund pays an investment management fee to
Advisory Services based on the net assets of the fund as follows:

ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
--------------------------------------------------------------
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% Over $250 million, up to and including $10 billion

Fees are further reduced on net assets over $10 billion.

The Franklin Large Cap Value Fund pays an investment management fee to Advisory
Services based on the net assets of the fund as follows:

ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
--------------------------------------------------------------
.550% First $500 million
.450% Over $500 million, up to and including $1 billion
.400% Over $1 billion, up to and including $1.5 billion

Fees are further reduced on net assets over $1.5 billion.

The Franklin MicroCap Value Fund pays an investment management fee to Advisory
Services of .75% per year of the average daily net assets of the fund.

The Franklin Small Cap Value Fund pays an investment management fee to Advisory
Services based on the net assets of the fund as follows:

ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
--------------------------------------------------------------
.750% First $500 million
.625% Over $500 million, up to and including $1 billion
.500% Over $1 billion

The Franklin Large Cap Value Fund pays an administrative fee to FT Services of
..20% per year of the fund's average net assets.

SEMIANNUAL REPORT 69

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONT.)

Under an agreement with Advisory Services, FT Services provides administrative
services to the Franklin Balance Sheet Investment Fund, the Franklin MicroCap
Value Fund, and the Franklin Small Cap Value Fund. The fees are paid by Advisory
Services based on average daily net assets, and are not additional expenses of
the funds.

The Funds reimburse Distributors for costs incurred in marketing the Funds'
shares up to a certain percentage per year of their average daily net assets of
each class as follows:

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
-----------------------------------------------------

Class A ..................................................... .25% .35% .25% .35%
Class B ..................................................... 1.00% 1.00% -- 1.00%
Class C ..................................................... 1.00% 1.00% -- 1.00%
Class R ..................................................... .50% .50% -- .50%

Distributors received (paid) net commissions on sales of the Funds' shares, and
received contingent deferred sales charges for the period as follows:

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
-----------------------------------------------------

Net commissions received (paid) ............................ $(505,328) $(63,537) $1,540 $(318,320)
Contingent deferred sales charges .......................... $ 159,327 $ 15,622 $ 497 $ 51,522

The Funds paid transfer agent fees of $3,567,069, of which $2,055,366 was paid
to Investor Services.

4. INCOME TAXES

At October 31, 2002, certain funds had tax basis capital losses which may be
carried over to offset future capital gains. Such losses expire as follows:

FRANKLIN FRANKLIN
LARGE CAP SMALL CAP
VALUE FUND VALUE FUND
------------------------
Capital loss carryovers expiring in:
2007 .......................................... $ -- $18,385,988
2008 .......................................... -- 1,120,570
2010 .......................................... 1,617,513 2,477,451
------------------------
$1,617,513 $21,984,009
------------------------

70 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

4. INCOME TAXES (CONT.)

At April 30, 2003, the net unrealized appreciation (depreciation) based on the
cost of investments for income tax purposes was as follows:

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
-------------------------------------------------------

Cost of investments ................................. $2,558,019,691 $67,186,431 $187,223,151 $304,060,029
-------------------------------------------------------
Unrealized appreciation ............................. $ 338,597,674 $ 2,511,724 $ 45,955,007 $ 27,908,377
Unrealized depreciation ............................. (203,208,103) (5,768,705) (25,228,397) (49,299,718)
-------------------------------------------------------
Net unrealized appreciation (depreciation) .......... $ 135,389,571 $(3,256,981) $ 20,726,610 $(21,391,341)
-------------------------------------------------------

Net investment income (loss) differs for financial statement and tax purposes
primarily due to differing treatments of foreign currency transactions.

Net realized capital gains and losses differ for financial statement and tax
purposes primarily due to differing treatments of wash sales and foreign
currency transactions.

5. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the
period ended April 30, 2003 were as follows:

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
---------------------------------------------------

Purchases .............................................. $154,851,334 $9,742,074 $ 5,078,191 $28,713,564
Sales .................................................. $128,545,117 $5,413,880 $30,383,514 $15,225,847

6. INVESTMENTS IN THE FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET
PORTFOLIO

The Funds may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (the Sweep Money Fund), an open-end investment company managed by
Franklin Advisers Inc. (an affiliate of the advisor). Management fees paid by
the Funds are reduced on assets invested in the Sweep Money Fund, in an amount
not to exceed the management fees paid by the Sweep Money Fund.

The Funds earned dividend income from investment in the Sweep Money Fund for the
period ended April 30, 2003, as follows:

FRANKLIN FRANKLIN FRANKLIN FRANKLIN
BALANCE SHEET LARGE CAP MICROCAP SMALL CAP
INVESTMENT FUND VALUE FUND VALUE FUND VALUE FUND
-------------------------------------------------

Dividend income .......................................... $854,614 $34,804 $51,098 $48,218

SEMIANNUAL REPORT 71

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

7. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO ISSUERS

The Investment Company Act of 1940 defines "affiliated companies" to include
investments in portfolio companies in which the funds own 5% or more of the
outstanding voting securities. Investments in "affiliated companies" for the
Franklin Balance Sheet Investment Fund and the Franklin MicroCap Value Fund at
April 30, 2003 were as shown below:

NUMBER OF NET
SHARES HELD NUMBER OF REALIZED
AT BEGINNING GROSS GROSS SHARES HELD AT VALUE AT DIVIDEND CAPITAL
NAME OF ISSUER OF PERIOD ADDITIONS REDUCTIONS END OF PERIOD END OF PERIOD INCOME GAINS (LOSSES)
- ------------------------------------------------------------------------------------------------------------------------

FRANKLIN BALANCE SHEET INVESTMENT FUND
Alaska Air Group Inc. ............. 1,350,600 -- -- 1,350,600 $ 24,081,198 $ -- $ --
Aztar Corp. ....................... 3,000,000 -- -- 3,000,000 42,720,000 -- --
Champps Entertainment Inc. ........ 950,000 -- 30,000 920,000 4,811,600 -- 106,798
Delta Woodside Industries Inc. .... 560,000 -- -- 560,000 1,948,800 -- --
DIMON Inc. ........................ 2,504,200 -- -- 2,504,200 16,427,552 375,630 --
Dollar Thrifty Automotive Group Inc. 1,705,700 45,500 -- 1,751,200 28,737,192 -- --
ESCO Technologies Inc. ............ 669,000 -- 50,600 618,400 a -- 1,322,318
Handleman Co. ..................... 1,750,000 -- 155,000 1,595,000 27,035,250 -- 1,246,112
Haverty Furniture Cos. Inc. ....... 920,000 -- -- 920,000 12,926,000 105,800 --
Insteel Industries Inc. ........... 560,000 -- -- 560,000 380,800 -- --
Kaneb Services Inc. ............... 997,500 -- 997,500 -- a 361,594 3,378,555
Nash-Finch Co. .................... 800,000 -- 800,000 -- a 72,000 (8,757,353)
Syms Corp. ........................ 1,430,000 -- -- 1,430,000 10,138,700 -- --
Tecumseh Products Co., B .......... 275,000 -- -- 275,000 10,587,500 176,000 --
Tommy Hilfiger Corp. .............. 4,543,600 -- 773,500 3,770,100 a -- (4,824,236)
Xanser Corp. ...................... 2,986,700 -- 186,700 2,800,000 4,900,000 -- (769,939)
-------------------------------------
TOTAL NON-CONTROLLED AFFILIATED ISSUERS $184,694,592 $1,091,024 $(8,297,745)
-------------------------------------

<FN>
a As of April 30, 2003, no longer an affiliate.
</FN>

72 SEMIANNUAL REPORT

FRANKLIN VALUE INVESTORS TRUST
Notes to Financial Statements (unaudited) (CONTINUED)

7. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO ISSUERS (CONT.)

FRANKLIN MICROCAP VALUE FUND
ACMAT Corp., A .................. 443,500 -- 10,900 432,600 $ 3,501,897 $ -- $ (55,902)
Airnet System Inc. .............. 641,000 -- 48,400 592,600 1,232,608 -- (286,679)
American Pacific Corp. .......... 680,000 -- -- 680,000 5,256,400 -- --
Art's-Way Manufacturing Co. Inc. 134,500 -- -- 134,500 488,907 -- --
Commonwealth Industries Inc. .... 1,000,000 -- 130,000 870,000 4,219,500 96,500 131,195
Continental Materials Corp. ..... 100,000 -- 5,000 95,000 2,479,500 -- 28,761
Delta Apparel Inc. .............. 435,000 -- 95,000 340,000 5,440,000 43,500 671,897
Duckwall-ALCO Stores Inc. ....... 231,100 25,000 -- 256,100 2,368,925 --
ECC International Corp. ......... 500,000 -- -- 500,000 2,235,000 --
Ecology & Environment Inc., A ... 290,000 -- 43,000 247,000 2,068,625 46,400 (38,536)
Espey Manufacturing &
Electronics Corp. ............. 79,800 -- 1,800 78,000 1,404,000 11,768 6,918
Fresh Brands Inc. ............... 264,000 -- -- 264,000 3,564,000 47,520 --
GA Financial Inc. .............. 270,000 -- 98,000 172,000 a 96,600 935,194
Gehl Co. ........................ 332,500 -- -- 332,500 2,826,250 -- --
Haggar Corp. .................... 567,900 -- 77,200 490,700 5,103,280 27,145 23,709
Hardinge Inc. ................... 706,000 25,600 31,600 700,000 4,697,000 7,060 (157,063)
International Shipholding Corp. . 560,000 -- 37,300 522,700 4,521,355 -- (44,283)
Invivo Corp. .................... 280,000 -- -- 280,000 4,284,000 -- --
Layne Christensen Co. ........... 750,000 -- 155,000 595,000 4,432,750 -- (243,605)
Merchants Group Inc. ............ 225,000 -- 25,000 200,000 4,070,000 43,500 93,752
Nashua Corp. .................... 470,000 -- 20,000 450,000 3,993,750 -- (89,293)
National R.V. Holdings Inc. ..... 574,500 -- 144,500 430,000 a -- (1,204,960)
S&K Famous Brands Inc. .......... 286,000 -- 6,000 280,000 2,903,600 -- 3,849
Seneca Foods Corp., A ........... 262,600 -- 6,000 256,600 4,439,180 -- 18,700
United Retail Group Inc. ........ 1,000,600 -- 121,800 878,800 1,291,836 -- (577,562)
Village Super Market Inc., A .... 110,675 -- -- 110,675 2,558,806 -- --
Zemex Corp. (Canada) ............ 480,000 -- 480,000 -- a -- 600,543
----------------------------------
TOTAL NON-CONTROLLED AFFILIATED ISSUERS $79,381,169 $419,993 $ (183,365)
----------------------------------
<FN>
a As of April 30, 2003, no longer an affiliate.
</FN>

SEMIANNUAL REPORT 78

This page intentionally left blank.

LITERATURE REQUEST
For a brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Investments at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. 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 determined by the presence of a regular beeping
tone.

FRANKLIN TEMPLETON INVESTMENTS

GLOBAL GROWTH
Franklin Global Aggressive
Growth Fund
Franklin Global Growth Fund
Franklin Global Health Care Fund
Mutual Discovery Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global Opportunities Trust
Templeton Global Smaller
Companies Fund
Templeton Growth Fund
Templeton International (Ex EM) Fund
Templeton World Fund

GLOBAL GROWTH & INCOME
Franklin Global Communications Fund
Mutual European Fund
Templeton Global Bond Fund

GLOBAL INCOME
Franklin Templeton Hard
Currency Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Biotechnology
Discovery Fund
Franklin Blue Chip Fund
Franklin Capital Growth Fund 1
Franklin DynaTech Fund
Franklin Flex Cap Growth Fund 2
Franklin Gold and Precious
Metals Fund
Franklin Growth Fund
Franklin Large Cap Growth Fund
Franklin Small-Mid Cap
Growth Fund
Franklin Technology Fund
Franklin U.S. Long-Short Fund 3

GROWTH & INCOME
Franklin Balance Sheet Investment Fund 4
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 4
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Small Cap Value Fund
Franklin Utilities Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund

FUND ALLOCATOR SERIES
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth
Target Fund
Franklin Templeton Moderate
Target Fund

INCOME
Franklin Adjustable U.S. Government Securities Fund 5
Franklin's AGE High Income Fund
Franklin Floating Rate Daily
Access Fund
Franklin Floating Rate Trust 6
Franklin Short-Intermediate
U.S. Government Securities Fund 5
Franklin Strategic Income Fund
Franklin Total Return Fund
Franklin U.S. Government
Securities Fund 5
Franklin Federal Money Fund 5,7
Franklin Money Fund 5,7

TAX-FREE INCOME8
Double Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free
Income Fund
Insured Tax-Free Income Fund 9
Tax-Exempt Money Fund 5,7

STATE-SPECIFIC
TAX-FREE INCOME 8
Alabama
Arizona
California 10
Colorado
Connecticut
Florida 10
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 9
Michigan 9
Minnesota 9
Missouri
New Jersey
New York 10
North Carolina
Ohio 9
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust 11

1. Formerly Franklin Growth and Income Fund. Effective 5/1/02, the fund's name
changed; investment goal and strategy remained the same.

2. Formerly Franklin California Growth Fund. Effective 9/1/02, the fund's name
changed and its investment criteria was modified to invest a majority of its net
assets in California companies, as opposed to at least 80% of net assets.

3. Upon reaching approximately $350 million in assets, the fund will close to
all investors.

4. The fund is only open to existing shareholders as well as select retirement
plans.

5. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

6. 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.

7. No assurance exists that the fund's $1.00 per share price will be maintained.
It is possible to lose money by investing in the fund.

8. For investors subject to the alternative minimum tax, a small portion of
these dividends may be taxable. Distributions of capital gains are generally
taxable.

9. Portfolio of insured municipal securities.

10. These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
intermediate-term and money market portfolios (CA and NY).

11. The funds of the Franklin Templeton Variable Insurance Products Trust are
generally only available as investment options in variable annuity or variable
life insurance contracts.

12/02

Not part of the semiannual report

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
One Franklin Parkway
San Mateo, CA 94403-1906

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SEMIANNUAL REPORT AND SHAREHOLDER LETTER
FRANKLIN VALUE INVESTORS TRUST

INVESTMENT MANAGER
Franklin Advisory Services, LLC
One Parker Plaza
Ninth Floor
Fort Lee, NJ 07024

DISTRIBUTOR
Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES
1-800/632-2301

This report must be preceded or accompanied by the current Franklin Value
Investors Trust prospectus, which contains more complete information including
charges and expenses.

To ensure the highest quality of service, telephone calls to and from our
service departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

FVIT S2003 06/03

ITEM 2. CODE OF ETHICS. N/A
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. N/A
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS N/A
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 9. 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 10. EXHIBITS.
(A) N/A

(B)(1) CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND ADMINISTRATION,
AND KIMBERLEY H. MONASTERIO, CHIEF FINANCIAL OFFICER

(B)(2) CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND ADMINISTRATION,
AND KIMBERLEY H. MONASTERIO, CHIEF FINANCIAL OFFICER

SIGNATURES

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

FRANKLIN VALUE INVESTORS TRUST

By/S/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date June 30, 2003

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

By/S/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date June 30, 2003

By/S/Kimberley H. Monasterio
Chief Financial Officer
Date June 30, 2003