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

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-6198
----------

TEMPLETON CAPITAL ACCUMULATOR FUND
--------------------------------------
(Exact name of registrant as specified in charter)

500 EAST BROWARD BLVD., FORT LAUDERDALE, FL 33394-3091
--------------------------------------------------------
(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: (954) 527-7500
--------------

Date of fiscal year end: 8/31
----

Date of reporting period: 2/29/04
-------

ITEM 1. REPORTS TO STOCKHOLDERS

FEBRUARY 29, 2004

[GRAPHIC
OMITTED]

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

GLOBAL

TEMPLETON CAPITAL
ACCUMULATOR FUND

[GRAPHIC
OMITTED]

[LOGO OMITTED]
FRANKLIN[R] TEMPLETON[R]
INVESTMENTS

Franklin o TEMPLETON o Mutual Series

page

Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager structure combines the
specialized expertise of three world-class investment management
groups--Franklin, Templeton and Mutual Series.

Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.

FRANKLIN. Founded in 1947, Franklin is a leader in tax-free investing and a
driving force in fixed income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity investing.

TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in
1954, launched what has become the industry's oldest global fund. Today, with
research offices in over 25 countries, they offer investors the broadest global
reach in the industry.

MUTUAL SERIES. Established in 1949, Mutual Series is dedicated to a unique style
of value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.

Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.

At Franklin Templeton Investments, we seek to consistently provide investors
with exceptional risk-adjusted returns over the long term, as well as the
reliable account services that have helped us become one of the most trusted
names in financial services.

SPECIALIZED EXPERTISE

TRUE DIVERSIFICATION

RELIABILITY YOU CAN TRUST

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

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Not part of the semiannual report
page

Contents

SHAREHOLDER LETTER ........................................................ 1

SEMIANNUAL REPORT

Templeton Capital Accumulator Fund ........................................ 3

Performance Summary ....................................................... 6

Financial Highlights and
Statement of Investments .................................................. 7

Financial Statements ...................................................... 13

Notes to Financial Statements ............................................. 16

Proxy Voting Policies and Procedures ...................................... 21

- --------------------------------------------------------------------------------

Semiannual Report

Templeton Capital Accumulator Fund

YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: Templeton Capital Accumulator Fund
seeks long-term capital growth. Under normal market conditions, the Fund invests
in equity securities of companies of any nation.

We are pleased to bring you Templeton Capital Accumulator Fund's semiannual
report for the period ended February 29, 2004.

PERFORMANCE OVERVIEW

For the six months under review, Templeton Capital Accumulator Fund delivered a
21.59% cumulative total return, as shown in the Performance Summary on page 6.
The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) All Country (AC) World Index, which posted a 19.39% total return for the
same period. 1

ECONOMIC AND MARKET OVERVIEW

The global economy continued to improve during the six-month period ended
February 29, 2004. This supported investor sentiment and contributed to strong
total returns for most local stock market indexes. The MSCI World Index returned
18.97% and the MSCI Europe Australasia Far East (EAFE) Index returned 25.30% for
the period under review. 2

A synchronized global recovery provided the foundation for a sharp improvement
in corporate profitability. As of the end of 2003, corporate profits in the U.S.
and the U.K. reached new highs, up 82% and 29% from their recession lows in
2001. 3 Corporate profits in Japan and Canada were still below their recent
highs; however, they increased 32% and 47% from their respective recession low
points in 2001. 3

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF TEXT USED IN GRAPHIC AS FOLLOWS:

GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets as of 2/29/04

Europe 49.5%
North America 22.3%
Asia 16.0%
Australia & New Zealand 2.6%
Latin America 2.1%
Middle East & Africa 0.9%
Short-Term Investments & Other Net Assets 6.6%

1. Source: Standard & Poor's Micropal. The MSCI AC World Index is a free
float-adjusted, market capitalization-weighted index designed to measure equity
market performance in global developed and emerging markets. 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.

2. Source: Standard & Poor's Micropal. The MSCI World Index is a free
float-adjusted, market capitalization-weighted index designed to measure equity
market performance in global developed markets. The MSCI EAFE Index is a free
float-adjusted, market capitalization-weighted index designed to measure equity
market performance in global developed markets excluding the U.S. and Canada.
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.

3. Source: ISI Group.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 8.

Semiannual Report | 3
page

TOP 10 SECTORS/INDUSTRIES
2/29/04

- --------------------------------------------------------------------------------
% OF TOTAL
NET ASSETS
- --------------------------------------------------------------------------------
Diversified Telecommunication Services 8.7%
Insurance 7.1%
Pharmaceuticals 7.1%
Oil & Gas 6.0%
Commercial Banks 5.4%
Metals & Mining 4.5%
Household Durables 4.0%
Food Products 3.6%
Machinery 3.5%
Electric Utilities 3.1%

China continued its role as a main driver in the current worldwide recovery. In
2003, 80% of the world's export growth resulted from greater demand in China.
While Japan's exports to China grew 27% compared with the previous year, U.S.
exports grew 54%. 3 As China continued to industrialize and build its
infrastructure (roads, bridges and energy generation), global demand for
commodities intensified, leading to higher prices of those commodities. In 2003,
prices for aluminum contracts rose 19% over the previous year, silver 24%, zinc
33%, and copper 50%. 4

Historically, surges in commodity prices have generally coincided with labor
shortages and wage inflation, leading to overall inflation and monetary
tightening. However, the current abundant labor supply in the U.S., China and
India, and China's ability to provide low-cost products to many large economies,
have resulted in less inflationary pressure.

In the currency market, the U.S. dollar appreciated versus the euro in the first
two months of 2004. This was a reversal of the trend toward a lower dollar over
the past several months. In 2003, the dollar declined 17% in value versus the
euro. 5 In the short term, a lower dollar boosts total returns generated in
currencies that have appreciated versus the dollar; however, it makes U.S.
operations of foreign-based companies appear less profitable and eventually
increases the cost of U.S. imports.

INVESTMENT STRATEGY

Our investment strategy employs a bottom-up, value-oriented, long-term approach.
We focus on the market price of a company's securities relative to our
evaluation of the company's long-term earnings, asset value and cash flow
potential. As we look worldwide, we consider specific companies, rather than
sectors or countries, while doing in-depth research to construct a bargain list
from which we buy.

MANAGER'S DISCUSSION

The Fund's materials and industrials sectors holdings contributed to Fund
performance during the six months under review as these sectors benefited from
the strengthening global economy. 6 Stock selection in the health care and
utilities

4. Sources: Reuters, Commodity Research Bureau Index; London Metal Exchange. 5.
Source: European Central Bank.

6. The materials sector comprises chemicals, construction materials, containers
& packaging, metals & mining, and paper & forest products in the SOI. The
industrials sector comprises aerospace & defense, air freight & logistics,
airlines, commercial services & supplies, electrical equipment, industrial
conglomerates, machinery, and road & rail in the SOI.

4 | Semiannual Report
page

sectors also aided Fund returns. 7 The financials and consumer discretionary
sectors performed well, but our stock selection and underweighting relative to
the benchmark index somewhat restrained the Fund's performance. 8

We added several new positions during the reporting period including Australian
airline Qantas Airways and Denmark-based Vestas Wind Systems, a leading
wind-powered, electricity-generating equipment manufacturer. Qantas and Vestas
boosted Fund returns during the period.

French aluminum producer Pechiney was acquired by Canada's Alcan in a tender
offer. Our holdings in Pechiney and Alcan delivered positive returns during the
period. We reduced our position in Norsk Hydro, a Norwegian metals and energy
company, following strong stock price performance over the reporting period.

Thank you for your continued participation in Templeton Capital Accumulator
Fund. We look forward to serving your future investment needs.

[photo omitted]

/S/Gary P. Motyl

Gary P. Motyl, CFA
Portfolio Manager
Templeton Capital Accumulator Fund

THIS DISCUSSION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF
FEBRUARY 29, 2004, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR
MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.

7. The health care sector comprises biotechnology, health care equipment &
supplies, health care providers & services, and pharmaceuticals in the SOI. The
utilities sector comprises electric utilities, and multi-utilities & unregulated
power in the SOI.

8. The financials sector comprises capital markets, commercial banks,
diversified financial services, insurance, and real estate in the SOI. The
consumer discretionary sector comprises auto components; automobiles; hotels,
restaurants & leisure; household durables; media; multiline retail; specialty
retail; and textiles, apparel & luxury goods in the SOI.

TOP 10 EQUITY HOLDINGS
2/29/04

- --------------------------------------------------------------------------------
COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
- --------------------------------------------------------------------------------
Samsung Electronics Co. Ltd. 2.5%
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT, SOUTH KOREA
Aventis SA 2.1%
PHARMACEUTICALS, FRANCE
BHP Billiton PLC 2.0%
METALS & MINING, U.K
Telefonica SA 1.8%
DIVERSIFIED TELECOMMUNICATION
SERVICES, SPAIN
E.ON AG 1.7%
ELECTRIC UTILITIES, GERMANY
Koninklijke Philips Electronics NV 1.6%
HOUSEHOLD DURABLES, NETHERLANDS
Mylan Laboratories Inc. 1.5%
PHARMACEUTICALS, U.S.
Deutsche Post AG 1.4%
AIR FREIGHT & LOGISTICS, GERMANY
AT&T Wireless Services Inc. 1.3%
WIRELESS TELECOMMUNICATION
SERVICES, U.S.
Alcan Inc. 1.3%
METALS & MINING, CANADA

Semiannual Report | 5
page

Performance Summary as of 2/29/04

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses. Capital
gain distributions are net profits realized from the sale of portfolio
securities. The performance table does 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

- --------------------------------------------------------------------------------------------------
CHANGE 2/29/04 8/31/03
- --------------------------------------------------------------------------------------------------

Net Asset Value (NAV) +$2.07 $12.25 $10.18
DISTRIBUTIONS (9/1/03-2/29/04)
Dividend Income $0.1105

PERFORMANCE 1

- --------------------------------------------------------------------------------------------------
6-MONTH 1-YEAR 5-YEAR 10-YEAR
- --------------------------------------------------------------------------------------------------
Cumulative Total Return 2 21.59% 51.68% 40.77% 131.23%
Average Annual Total Return 3 21.59% 51.68% 7.08% 8.74%
Value of $10,000 Investment 4 $12,159 $15,168 $14,077 $23,123
Avg. Ann. Total Return (3/31/04) 5 54.35% 5.89% 9.16%

PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. ONGOING MARKET VOLATILITY
CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE; MORE RECENT RETURNS MAY DIFFER
FROM THOSE SHOWN. SINCE MARKETS CAN GO DOWN AS WELL AS UP, INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET CONDITIONS, AND YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES.

FOR MOST RECENT MONTH-END PERFORMANCE, CALL FRANKLIN TEMPLETON INVESTMENTS AT
1-800/342-5236.

ENDNOTES

THE FUND INVESTS IN FOREIGN SECURITIES, WHICH CAN INVOLVE EXPOSURE TO CURRENCY
VOLATILITY AND POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY. INVESTMENTS IN
DEVELOPING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN
ADDITION TO THOSE ASSOCIATED WITH THEIR RELATIVELY SMALL SIZE AND LESSER
LIQUIDITY. THE FUND'S PROSPECTUS ALSO INCLUDES A DESCRIPTION OF THE MAIN
INVESTMENT RISKS.

1. Calculations do not include the effect of paying sales and creation charges
applicable to purchases of Fund shares through Templeton Capital Accumulation
Plans, which may vary as discussed in the Plans' prospectuses. For the first
year of a Plan, these charges can amount to 50% of the total amount invested
during the year. Total returns would have been lower if these charges had been
applied. Please refer to the Templeton Capital Accumulation Plans' prospectuses
for information regarding applicable sales charges. Past expense reductions by
the Fund's manager increased the Fund's total returns. Without these reductions,
the Fund's total returns would have been lower.

2. Cumulative total return represents the change in value of an investment over
the periods indicated.

3. Average annual total return represents the average annual change in value of
an investment over the periods indicated. Six-month return has not been
annualized.

4. These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated.

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

6 | Past performance does not guarantee future results. | Semiannual Report
page

Templeton Capital Accumulator Fund

FINANCIAL HIGHLIGHTS

- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED AUGUST 31,
(UNAUDITED) 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ...... $10.18 $9.29 $10.85 $13.34 $12.11 $9.69
-----------------------------------------------------------------------------
Income from investment operations:

Net investment income (loss) a ........... (.01) .12 .12 .16 .16 .18

Net realized and unrealized gains (losses) 2.19 .87 (1.57) (1.45) 1.71 2.78
-----------------------------------------------------------------------------
Total from investment operations .......... 2.18 .99 (1.45) (1.29) 1.87 2.96
-----------------------------------------------------------------------------
Less distributions from:

Net investment income .................... (.11) (.10) (.11) (.16) (.15) (.18)

Net realized gains ....................... -- -- -- (1.04) (.49) (.36)
-----------------------------------------------------------------------------
Total distributions ....................... (.11) (.10) (.11) (1.20) (.64) (.54)
-----------------------------------------------------------------------------
Net asset value, end of period ............ $12.25 $10.18 $9.29 $10.85 $13.34 $12.11
=============================================================================

Total return b ............................ 21.59% 10.86% (13.38)% (9.96)% 16.44% 32.01%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ......... $589,014 $457,645 $354,042 $364,236 $370,029 $291,136

Ratios to average net assets:

Expenses ................................. 1.12% c 1.12% 1.11% 1.05% 1.03% 1.11%

Net investment income (loss) ............. (.10)% c 1.35% 1.13% 1.35% 1.24% 1.60%

Portfolio turnover rate ................... 1.32% 21.32% 14.28% 22.37% 32.13% 13.96%

aBased on average daily shares outstanding.
bTotal return is not annualized for periods less than one year.
cAnnualized.

Semiannual Report | See notes to financial statements. | 7
page

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED)

Alumina Ltd. ............................. Metals & Mining 894,060 $ 3,793,973
Australia & New Zealand Banking Group
Ltd. .................................... Commercial Banks 223,540 3,102,782
a Australia & New Zealand Banking Group
Ltd., 144A .............................. Commercial Banks 40,643 564,133
Qantas Airways Ltd. ...................... Airlines 1,051,370 3,009,500
a WMC Resources Ltd. ....................... Metals & Mining 600,000 2,421,128
-------------
12,891,516
-------------
BERMUDA 1.7%
Ace Ltd. ................................. Insurance 137,470 6,180,651
XL Capital Ltd., A ....................... Insurance 50,300 3,855,998
-------------
10,036,649
-------------
BRAZIL .6%
Embraer-Empresa Brasileira de Aeronautica
SA, ADR ................................. Aerospace & Defense 125,985 3,803,487
-------------
CANADA 4.2%
Alcan Inc. (EUR Traded) .................. Metals & Mining 23,940 1,130,326
Alcan Inc. ............................... Metals & Mining 159,160 7,580,791
BCE Inc. ................................. Diversified Telecommunication Services 325,460 7,104,694
a Celestica Inc. ........................... Electronic Equipment & Instruments 204,530 3,506,011
Husky Energy Inc. ........................ Oil & Gas 273,820 5,214,161
-------------
24,535,983
-------------
CHILE .8%
Cia de Telecomunicaciones de Chile SA,
ADR ..................................... Diversified Telecommunication Services 292,525 4,586,792
-------------
CHINA .1%
a China Life Insurance Co. Ltd. ............ Insurance 946,000 674,512
-------------
DENMARK .4%
Vestas Wind Systems AS ................... Electrical Equipment 124,170 2,360,174
-------------
FINLAND .7%
Stora Enso OYJ, R (EUR/FIM Traded) ....... Paper & Forest Products 156,910 2,084,127
Stora Enso OYJ, R (SEK Traded) ........... Paper & Forest Products 145,997 1,951,412
-------------
4,035,539
-------------
FRANCE 6.0%
Accor SA ................................. Hotels Restaurants & Leisure 61,110 2,681,056
Aventis SA ............................... Pharmaceuticals 165,320 12,653,246
AXA SA ................................... Insurance 199,732 4,586,120
Michelin SA, B ........................... Auto Components 124,150 5,985,140
Suez SA .................................. Multi-Utilities & Unregulated Power 201,170 4,466,667
Total SA, B .............................. Oil & Gas 26,062 4,760,153
-------------
35,132,382
-------------

8 | Semiannual Report
page

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
GERMANY 7.1%
BASF AG .................................. Chemicals 80,690 $ 4,291,008
Bayer AG, Br. ............................ Chemicals 111,770 3,166,328
Celesio AG ............................... Health Care Providers & Services 105,466 5,545,670
Deutsche Post AG ......................... Air Freight & Logistics 335,080 7,993,658
E.ON AG .................................. Electric Utilities 150,880 10,188,895
Hugo Boss AG ............................. Textiles Apparel & Luxury Goods 120,710 2,759,668
Muenchener Rueckversicherungs-
Gesellschaft ............................ Insurance 18,960 2,214,430
Muenchener Rueckversicherungs-
Gesellschaft, 144A ...................... Insurance 5,417 632,678
Volkswagen AG ............................ Automobiles 107,970 5,111,212
-------------
41,903,547
-------------
HONG KONG 2.1%
Cheung Kong Holdings Ltd. ................ Real Estate 436,000 4,158,996
China Mobile (Hong Kong) Ltd., fgn. ...... Wireless Telecommunication Services 1,230,500 4,355,207
Hutchison Whampoa Ltd. ................... Industrial Conglomerates 247,650 2,083,940
Swire Pacific Ltd., A .................... Diversified Financial Services 190,000 1,330,319
Swire Pacific Ltd., B .................... Diversified Financial Services 112,500 130,799
-------------
12,059,261
-------------
INDIA 1.1%
ICICI Bank Ltd. .......................... Commercial Banks 325,519 1,955,921
ICICI Bank Ltd., ADR ..................... Commercial Banks 80,185 1,194,756
Satyam Computers Services Ltd. ........... IT Services 43,400 297,041
Satyam Computers Services Ltd., ADR ...... IT Services 140,100 2,874,852
-------------
6,322,570
-------------
ISRAEL .9%
a Check Point Software Technologies Ltd. ... Software 234,490 5,397,960
-------------
ITALY 1.7%
Eni SpA .................................. Oil & Gas 339,760 6,657,325
Riunione Adriatica di Sicurta SpA ........ Insurance 177,381 3,222,184
-------------
9,879,509
-------------
JAPAN 6.6%
East Japan Railway Co. ................... Road & Rail 581 2,711,972
Hitachi Ltd. ............................. Electronic Equipment & Instruments 354,000 2,310,104
Kikkoman Corp. ........................... Food Products 330,000 2,506,864
Komatsu Ltd. ............................. Machinery 771,000 4,685,557
NEC Corp. ................................ Computers & Peripherals 447,000 3,289,292
Nintendo Co. Ltd. ........................ Software 32,000 3,075,234
Nippon Telegraph & Telephone Corp. ....... Diversified Telecommunication Services 886 4,103,203
Nomura Holdings Inc. ..................... Capital Markets 206,000 3,271,188
Seiko Epson Corp. ........................ Computers & Peripherals 94,100 3,307,194
Sompo Japan Insurance Inc. ............... Insurance 682,000 5,786,326
Sony Corp. ............................... Household Durables 95,200 3,886,070
-------------
38,933,004
-------------

Semiannual Report | 9
page

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
MEXICO .7%
Telefonos de Mexico SA de CV (Telmex), L,
ADR ..................................... Diversified Telecommunication Services 125,740 $ 4,271,388
-------------
NETHERLANDS 3.9%
IHC Caland NV ............................ Energy Equipment & Services 80,950 3,932,688
ING Groep NV ............................. Diversified Financial Services 271,600 6,641,263
Koninklijke Philips Electronics NV ....... Household Durables 317,267 9,638,282
Wolters Kluwer NV ........................ Media 150,890 2,694,096
-------------
22,906,329
-------------
NORWAY 1.6%
Norsk Hydro ASA .......................... Oil & Gas 89,890 6,454,964
Norske Skogindustrier ASA, A ............. Paper & Forest Products 145,300 2,961,957
-------------
9,416,921
-------------
PORTUGAL 1.1%
Portugal Telecom SGPS SA ................. Diversified Telecommunication Services 553,710 6,246,893
-------------
SINGAPORE .7%
DBS Group Holdings Ltd. .................. Commercial Banks 484,900 4,187,417
-------------
SOUTH KOREA 5.0%
Kookmin Bank ............................. Commercial Banks 110,304 4,605,380
Korea Electric Power Corp. ............... Electric Utilities 101,110 1,779,742
KT Corp., ADR ............................ Diversified Telecommunication Services 140,600 2,674,212
LG Electronics Inc. ...................... Household Durables 104,610 5,888,760
Samsung Electronics Co. Ltd. ............. Semiconductors & Semiconductor Equipment 31,760 14,718,708
-------------
29,666,802
-------------
SPAIN 3.5%
Endesa SA ................................ Electric Utilities 82,930 1,622,886
Iberdrola SA, Br. ........................ Electric Utilities 225,770 4,656,613
Repsol YPF SA ............................ Oil & Gas 191,120 3,918,194
a Telefonica SA ............................ Diversified Telecommunication Services 656,090 10,654,544
-------------
20,852,237
-------------
SWEDEN 4.9%
Atlas Copco AB, A ........................ Machinery 169,810 6,079,144
Electrolux AB, B ......................... Household Durables 208,170 4,390,356
Foreningssparbanken AB, A ................ Commercial Banks 229,350 4,344,100
Nordea Bank AB ........................... Commercial Banks 684,060 4,751,184
Securitas AB, B .......................... Commercial Services & Supplies 217,650 3,333,078
Volvo AB, B .............................. Machinery 198,470 6,238,680
-------------
29,136,542
-------------
SWITZERLAND 3.6%
Adecco SA ................................ Commercial Services & Supplies 81,100 4,032,491
a Clariant AG .............................. Chemicals 152,000 2,285,894
Nestle SA ................................ Food Products 17,390 4,586,945
SIG Holding AG ........................... Machinery 25,000 3,720,326
Swiss Reinsurance Co. .................... Insurance 88,990 6,404,225
-------------
21,029,881
-------------

10 | Semiannual Report
page

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
TAIWAN .4%
Chunghwa Telecom Co. Ltd., ADR ........... Diversified Telecommunication Services 152,310 $ 2,503,976
-------------
UNITED KINGDOM 14.6%
Abbey National PLC ....................... Commercial Banks 441,490 3,973,697
Amersham PLC ............................. Health Care Equipment & Supplies 261,785 3,858,284
BAE Systems PLC .......................... Aerospace & Defense 1,017,850 3,593,690
BHP Billiton PLC ......................... Metals & Mining 1,279,734 11,732,181
BP PLC ................................... Oil & Gas 373,340 2,998,291
Brambles Industries PLC .................. Commercial Services & Supplies 878,378 3,415,054
a British Airways PLC ...................... Airlines 835,990 4,902,530
Cable & Wireless PLC ..................... Diversified Telecommunication Services 1,336,440 3,478,440
Cadbury Schweppes PLC .................... Food Products 429,080 3,535,520
a CellTech Group PLC ....................... Biotechnology 182,390 1,370,844
Hanson PLC ............................... Construction Materials 495,621 3,996,424
Imperial Chemical Industries PLC ......... Chemicals 548,639 2,397,782
Kidde PLC ................................ Electrical Equipment 1,340,880 2,370,211
National Grid Transco PLC ................ Multi-Utilities & Unregulated Power 562,790 4,491,040
Rolls-Royce Group PLC .................... Aerospace & Defense 1,117,630 4,563,025
Shell Transport & Trading Co. PLC, ADR ... Oil & Gas 134,120 5,645,111
a Shire Pharmaceuticals Group PLC .......... Pharmaceuticals 373,550 3,790,266
Smiths Group PLC ......................... Industrial Conglomerates 204,400 2,526,313
Standard Chartered PLC ................... Commercial Banks 185,080 3,187,422
Unilever PLC ............................. Food Products 631,940 6,596,757
WPP Group PLC ............................ Media 336,000 3,753,772
-------------
86,176,654
-------------
UNITED STATES 16.4%
Abbott Laboratories ...................... Pharmaceuticals 167,650 7,175,420
Albertson's Inc. ......................... Food & Staples Retailing 117,360 2,903,486
American International Group Inc. ........ Insurance 72,920 5,396,080
AmerisourceBergen Corp. .................. Health Care Providers & Services 67,860 3,937,916
a AT&T Wireless Services Inc. .............. Wireless Telecommunication Services 558,840 7,589,047
a BMC Software Inc. ........................ Software 165,810 3,249,876
Boise Cascade Corp. ...................... Specialty Retail 120,710 4,067,927
Bristol-Myers Squibb Co. ................. Pharmaceuticals 143,620 3,995,508
CIGNA Corp. .............................. Health Care Providers & Services 53,200 2,948,876
Electronic Data Systems Corp. ............ IT Services 2,240 42,896
Georgia-Pacific Corp. .................... Paper & Forest Products 160,940 5,158,127
International Paper Co. .................. Paper & Forest Products 121,830 5,392,196
Kraft Foods Inc., A ...................... Food Products 122,940 4,154,143
Mylan Laboratories Inc. .................. Pharmaceuticals 377,220 8,864,670
Pfizer Inc. .............................. Pharmaceuticals 141,342 5,180,184
Procter & Gamble Co. ..................... Household Products 61,700 6,324,867
SBC Communications Inc. .................. Diversified Telecommunication Services 229,350 5,506,694
a Synopsys Inc. ............................ Software 103,940 3,064,151
Target Corp. ............................. Multiline Retail 118,990 5,230,800
Temple-Inland Inc. ....................... Containers & Packaging 11,740 764,861

Semiannual Report | 11
page

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

aNon-income producing.
bSee Note 6 regarding investments in the Franklin Institutional Fiduciary Trust
Money Market Portfolio.
cThe principal amount is stated in U.S. dollars unless otherwise indicated.

12 | See notes to financial statements. | Semiannual Report
page

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
February 29, 2004 (unaudited)

Assets:
Investments in securities:
Cost .................................... $441,269,898
-------------
Value ................................... 589,519,191
Receivables:
Capital shares sold ..................... 42,302
Dividends ............................... 709,302
-------------
Total assets ........................ 590,270,795
-------------
Liabilities:
Payables:
Capital shares redeemed ................. 67,999
Affiliates .............................. 453,938
Deferred tax liability (Note 1f) ........ 121,517
Other liabilities ........................ 613,248
-------------
Total liabilities ................... 1,256,702
-------------
Net assets, at value .............. $589,014,093
=============
Net assets consist of:
Undistributed net investment income ...... $(723,561)
Net unrealized appreciation (depreciation) 148,154,994
Accumulated net realized gain (loss) ..... (26,251,813)
Capital shares ........................... 467,834,473
-------------
Net assets, at value ...................... $589,014,093
=============
Shares outstanding ........................ 48,069,842
=============
Net asset value per share ................. $12.25
=============

Semiannual Report | See notes to financial statements. | 13
page

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended February 29, 2004 (unaudited)

Investment income:

(Net of foreign taxes of $182,264)
Dividends ...................................................................... $ 2,686,452
-------------
Expenses:
Management fees (Note 3) ....................................................... 1,907,481
Administrative fees (Note 3) ................................................... 369,020
Distribution fees (Note 3) ..................................................... 302,456
Transfer agent fees (Note 3) ................................................... 3,000
Custodian fees ................................................................. 68,200
Reports to shareholders ........................................................ 242,300
Professional fees .............................................................. 21,400
Trustees' fees and expenses .................................................... 16,300
Other .......................................................................... 5,700
-------------
Total expenses ............................................................ 2,935,857
-------------
Net investment income ................................................... (249,405)
-------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ................................................................... 1,741,412
Foreign currency transactions ................................................. (211,177)
-------------
Net realized gain (loss) .................................................. 1,530,235
Net unrealized appreciation (depreciation) on:
Investments ................................................................... 100,900,246
Translation of assets and liabilities denominated in foreign currencies ....... 29,353
Deferred taxes (Note 1f) ...................................................... (121,517)
-------------
Net unrealized appreciation (depreciation) ................................ 100,808,082
-------------
Net realized and unrealized gain (loss) ......................................... 102,338,317
-------------
Net increase (decrease) in net assets resulting from operations ................. $102,088,912
=============

14 | See notes to financial statements. | Semiannual Report
page

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
for the six months ended February 29, 2004 (unaudited)
and the year ended August 31, 2003

--------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2004 AUGUST 31, 2003
--------------------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income (loss) ................................................ $ (249,405) $ 5,009,213
Net realized gain (loss) from investments and foreign currency transactions . 1,530,235 (15,913,177)
Net unrealized appreciation (depreciation) on investments, translation of
assets and liabilities denominated in foreign currencies, and deferred taxes 100,808,082 58,425,390
--------------------------------------------
Net increase (decrease) in net assets resulting from operations ......... 102,088,912 47,521,426

Distributions to shareholders from net investment income ...................... (5,087,066) (3,882,934)

Capital share transactions (Note 2) ........................................... 34,367,174 59,964,520
--------------------------------------------
Net increase (decrease) in net assets ................................... 131,369,020 103,603,012

Net assets:
Beginning of period .......................................................... $457,645,073 $354,042,061
--------------------------------------------
End of period ................................................................ $589,014,093 $457,645,073
============================================
Undistributed net investment income included in net assets:
End of period ................................................................ $ (723,561) $ 4,612,910
============================================

Semiannual Report | See notes to financial statements. | 15
page

TEMPLETON CAPITAL ACCUMULATOR FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Capital Accumulator Fund is registered under the Investment Company
Act of 1940 as a diversified, open-end investment company. Shares of the Fund
are offered to the general public only through Templeton Capital Accumulation
Plans. The Fund seeks long term capital growth. Under normal market conditions,
the Fund invests in equity securities and debt obligations of companies and
governments of any nation. The following summarizes the Fund's significant
accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the last reported sales price. Over-the-counter securities and listed
securities for which no sale is reported are valued within the range of the
latest quoted bid and asked prices. Investments in open-end mutual funds are
valued at the closing net asset value. Foreign securities are valued at the
close of trading of the foreign exchange or the NYSE, whichever is earlier. If
events occur that materially affect the values of securities after the prices or
foreign exchange rates are determined, or if market quotations are not readily
available, the securities will be valued at fair value as determined following
procedures approved 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 Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, and the difference between the recorded
amounts of dividends, interest and foreign withholding taxes, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in foreign exchange rates
on foreign denominated assets and liabilities other than investments in
securities held at the end of the reporting period.

C. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate on a specified date. Realized and unrealized gains and losses are included
in the Statement of Operations.

16 | Semiannual Report
page

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. FOREIGN CURRENCY CONTRACTS (CONTINUED)

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts.

D. INCOME TAXES

No provision has been made for income taxes because the 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.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.

F. DEFERRED TAXES

The Fund is subject to a tax imposed on net realized gains of securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities as reflected in the accompanying
financial statements.

G. 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.

H. GUARANTEES AND INDEMNIFICATIONS

Under the Trust's organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Trust. Additionally, in the normal course of business, the Trust
enters into contracts with service providers that contain general
indemnification clauses. The Trust's maximum exposure under these arrangements
is unknown as this would involve future claims that may be made against the
Trust that have not yet occurred. However, based on experience, the Trust
expects the risk of loss to be remote.

Semiannual Report | 17
page

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST

At February 29, 2004, there were an unlimited number of shares of beneficial
interest authorized (without par value). Transactions in the Fund's shares were
as follows:

-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2004 AUGUST 31, 2003
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------

Shares sold ....................... 3,718,745 $ 41,333,779 8,128,145 $ 71,679,495
Shares issued in reinvestment of
distributions ..................... 472,306 5,019,610 451,611 3,825,788
Shares redeemed ................... (1,059,903) (11,986,215) (1,739,114) (15,540,763)
-----------------------------------------------------------------
Net increase (decrease) 3,131,148 $ 34,367,174 6,840,642 $ 59,964,520
=================================================================

3. TRANSACTIONS WITH AFFILIATES

Certain officers of the Trust are also officers or trustees of the following
entities:

- --------------------------------------------------------------------------------
ENTITY AFFILIATION
- --------------------------------------------------------------------------------
Templeton Investment Counsel, LLC (TIC) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
Franklin Templeton Distributors, Inc. (Distributors) Principal underwriter

The Fund pays an investment management fee to TIC of 0.75% per year of the
average daily net assets of the Fund.

The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:

- --------------------------------------------------------------------------------
ANNUALIZED FEE RATE NET ASSETS
- --------------------------------------------------------------------------------
0.150% First $200 million
0.135% Over $200 million, up to and including $700 million
0.100% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion

The Fund reimburses Distributors up to a blended rate of .10% of average daily
net assets per year attributable to Templeton Capital Accumulator Plan I and
..30% of average daily net assets per year attributable to Templeton Capital
Accumulator Plan II, for costs incurred in marketing the Fund's shares under a
Rule 12b-1 plan.

Under the distribution plan, costs and expenses exceeding the maximum may be
reimbursed in subsequent periods. At February 29, 2004, Distributors advised the
Fund unreimbursed costs were $208,025.

18 | Semiannual Report
page

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

Distributors has advised the Fund it received net commissions from sales of the
Fund's shares for the period of $343,441.

The Fund paid transfer agent fees of $3,000, of which $2,172 was paid to
Investor Services.

4. INCOME TAXES

At February 29, 2004, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:

Cost of investments ........................................ $441,269,898
-------------
Unrealized appreciation .................................... 165,861,140
Unrealized depreciation .................................... (17,611,847)
-------------
Net unrealized appreciation (depreciation) ................. $148,249,293
=============

Net investment income and net realized capital gains differ for financial
statement and tax purposes primarily due to differing treatments of losses
realized subsequent to October 31 on the sale of securities.

At August 31, 2003, the Fund had tax basis capital losses which may be carried
over to offset future capital gains. Such losses expire as follows:

Capital loss carryovers expiring in:
2010 ...................................................... $3,847,447
2011 ...................................................... 5,327,434
-----------
$9,174,881
===========

At August 31, 2003, the Fund had deferred capital losses occurring subsequent to
October 31, 2002 of $18,607,167. For tax purposes, such losses will be reflected
in the year ending August 31, 2004.

5. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term securities) for the
period ended February 29, 2004 aggregated $71,882,464 and 6,451,920,
respectively.

6. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund 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 Investment Manager). Management fees
paid by the Fund 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 Fund
earned $129,104 of dividend income from investment in the Sweep Money Fund for
the period ended February 29, 2004.

Semiannual Report | 19
page

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

7. REGULATORY MATTERS

On February 4, 2004, the Securities Division of the Office of the Secretary of
the Commonwealth of Massachusetts filed an administrative complaint against
Franklin Resources, Inc. and certain of its subsidiaries (the "Company"),
alleging violations of the Massachusetts Uniform Securities Act. The complaint
arises from activity that occurred in 2001 during which time an officer of a
Company subsidiary was negotiating an agreement with an investor relating to
investments in a mutual fund and a hedge fund.

The Fund, in addition to other entities within Franklin Templeton Investments,
including the Company and other funds, has been named in shareholder class and
derivative lawsuits related to the matter described above, as well as actions
seeking the return of certain management and other fees to the Fund. The Fund's
management believes that the claims made in the lawsuit are without merit and it
intends to defend vigorously against the allegations. It is anticipated that the
Fund may be named in additional similar civil actions related to the matter
described above.

In addition, as part of ongoing investigations by the U.S. Securities and
Exchange Commission (the "SEC"), the U.S. Attorney for the Northern District of
California, the New York Attorney General, the California Attorney General, the
U.S. Attorney for the District of Massachusetts, the Florida Department of
Financial Services, and the Commissioner of Securities and the Attorney General
of the State of West Virginia, relating to certain practices in the mutual fund
industry, including late trading, market timing and sales compensation
arrangements, the Company and its subsidiaries, as well as certain current or
former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees are providing documents and information in response to
these requests and subpoenas. In addition, the Company has responded to requests
for similar kinds of information from regulatory authorities in some of the
foreign countries where the Company conducts its global asset management
business.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against an affiliate of the Fund's investment
adviser relating to the frequent trading issues that are the subject of the
SEC's investigation. These issues were previously disclosed as being under
investigation by government authorities and the subject of an internal inquiry
by the Company in its Annual Report on Form 10-K and on its public website. The
Company currently is in discussions with the SEC Staff in an effort to resolve
the issues raised in their investigation. The Fund's management has been advised
that the Company cannot predict the likelihood of whether those discussions will
result in a settlement and, if so, the terms of such settlement. The impact, if
any, of these matters on the Fund is uncertain at this time. If the Company
finds that it bears responsibility for any unlawful or improper conduct, it has
committed to making the Fund or its shareholders whole, as appropriate.

20 | Semiannual Report
page

Templeton Capital Accumulator Fund

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group.

Semiannual Report | 21
page

This page intentionally left blank.
page

Literature Request

For a brochure and prospectus, which contains more complete information,
including charges, expenses and risks, 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, we may
monitor, record and access telephone calls to or from our service departments.
These calls can be identified by the presence of a regular beeping tone.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL

Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 1

VALUE
Franklin Balance Sheet Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 2
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 3
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 4

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Franklin Technology Fund
Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund

TARGET FUNDS
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 Federal Money Fund 5, 6
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 3
Franklin Income Fund

Franklin Money Fund 5, 6
Franklin Short-Intermediate U.S. Government Securities Fund 5
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund

page

Franklin Total Return Fund
Franklin U.S. Government Securities Fund 5
Templeton Global Bond Fund

TAX-FREE INCOME 7
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 8
Tax-Exempt Money Fund 5, 6

LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC 7
Alabama
Arizona
California 9
Colorado
Connecticut
Florida 9
Georgia Kentucky
Louisiana
Maryland
Massachusetts 8
Michigan 8
Minnesota 8
Missouri
New Jersey
New York 9
North Carolina
Ohio 8
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust 10

1.The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.
2.The fund is only open to existing shareholders as well as select retirement
plans.
3.The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.
4.Upon reaching approximately $350 million in assets, the fund intends to close
to all investors.
5.An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
6.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.
7.For investors subject to the alternative minimum tax, a small portion of fund
dividends may be taxable. Distributions of capital
gains are generally taxable.
8.Portfolio of insured municipal securities.
9.These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
limited-term, intermediate-term and money market portfolios (CA and NY).
10.The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

02/04 Not part of the semiannual report

page
[logo omitted]
FRANKLIN[R] TEMPLETON[R]
INVESTMENTS

One Franklin Parkway
San Mateo, CA 94403-1906

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

TEMPLETON CAPITAL
ACCUMULATOR FUND

INVESTMENT MANAGER
Templeton Investment Counsel, LLC

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

SHAREHOLDER SERVICES
1-800/632-2301

Authorized for distribution only when accompanied or preceded by a current
Templeton Capital Accumulator Fund prospectus. Investors should carefully
consider a fund's investment goals, risks, charges and expenses before
investing. Like any investment in securities, the value of the Fund's portfolio
will be subject to the risk of loss from market, currency, economic, political
and other factors. The Fund and its investors are not protected from such losses
by the Investment Manager. Therefore, investors who cannot accept this risk
should not invest in shares of the Fund. To obtain a prospectus, which contains
this and other information, talk to your financial advisor, call us at
1-800/DIAL BEN (R) (1-800/342-5236) or visit franklintempleton.com. Please read
the prospectus carefully before investing.

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

TCAP S2004 04/04

ITEM 2. CODE OF ETHICS.

(A) THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL
EXECUTIVE OFFICERS AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER.

(D) N/A

(F) PURSUANT TO ITEM 10(A), THE REGISTRANT IS ATTACHING AS AN EXHIBIT A COPY OF
ITS CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICERS FINANCIAL
AND ACCOUNTING OFFICER.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(A)(1) THE REGISTRANT HAS AN AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS
AUDIT COMMITTEE.

(2) THE AUDIT COMMITTEE FINANCIAL EXPERTS ARE IS FRED R. MILLSAPS AND FRANK A.
OLSON, WHO ARE "INDEPENDENT" AS DEFINED UNDER THE RELEVANT SECURITIES AND
EXCHANGE COMMISSION RULES AND RELEASES.

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 8. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES AND AFFILIATED PURCHASERS. N/A

ITEM 9. SUBMISSTION OF MATTERS OF A VOTE SECURITY HOLDERS.

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

ITEM 10. 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) CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS.

(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
DIOMEDES LOO-TAM, 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
DIOMEDES LOO-TAM, 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.

TEMPLETON CAPITAL ACCUMULATOR FUND

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date April 30, 2004

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 April 30, 2004

By /s/DIOMEDES LOO-TAM
Chief Financial Officer
Date April 30, 2004