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 811-06198
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TEMPLETON CAPITAL ACCUMULATOR FUND
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(Exact name of registrant as specified in charter)

500 EAST BROWARD BLVD., FORT LAUDERDALE, FL 33394-3091
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(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)

Registrant's telephone number, including area code: (954) 527-7500
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Date of fiscal year end: 8/31
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Date of reporting period: 2/28/05
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ITEM 1. REPORTS TO STOCKHOLDERS

[GRAPHIC OMITTED]

FEBRUARY 28, 2005
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SEMIANNUAL REPORT AND SHAREHOLDER LETTER | GLOBAL
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TEMPLETON CAPITAL
ACCUMULATOR FUND

[LOGO](R)
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS

Franklin o TEMPLETON o Mutual Series

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.

SPECIALIZED EXPERTISE FRANKLIN. Founded in 1947, Franklin is a
recognized leader in fixed income investing and
also brings expertise in growth- and value-style
U.S. equity investing.

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

MUTUAL SERIES. Founded 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.

TRUE DIVERSIFICATION 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.

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

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MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
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[GRAPHIC OMITTED]

Not part of the semiannual report

Contents

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

SEMIANNUAL REPORT

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

Performance Summary ....................................................... 7

Your Fund's Expenses ...................................................... 9

Important Notice to Shareholders .......................................... 11

Financial Highlights and
Statement of Investments .................................................. 12

Financial Statements ...................................................... 18

Notes to Financial Statements ............................................. 21

Shareholder Information ................................................... 30

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Semiannual Report

Templeton Capital Accumulator Fund

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

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PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU
MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY
DIFFER FROM FIGURES SHOWN. PLEASE CALL 1-800/632-2301 FOR MOST RECENT MONTH-END
PERFORMANCE.
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We are pleased to bring you Templeton Capital Accumulator Fund's semiannual
report for the period ended February 28, 2005.

PERFORMANCE OVERVIEW

For the six months under review, Templeton Capital Accumulator Fund delivered a
19.15% cumulative total return. The Fund outperformed its benchmark, the Morgan
Stanley Capital International (MSCI) All Country (AC) World Index, which posted
a 16.21% total return for the same period.(1) You can find the Fund's long-term
performance in the Performance Summary beginning on page 7. Please note that
index performance information is provided for reference and that we do not
attempt to track the index, but rather undertake investments on the basis of
fundamental research.

ECONOMIC AND MARKET OVERVIEW

For the six months under review, the global economy generally continued to
expand. In fourth quarter 2004, gross domestic product (GDP) increased at
annualized rates of 3.8% in the U.S. and 9.5% in China.(2) For the same quarter,
GDP grew an annualized 1.7% in Canada, while rising 2.8% in the U.K. and 1.6% in
the euro zone.(3) Japan's GDP rose only 0.5% annualized.(4) Industrial metals
and several other commodity prices rose particularly due to increased demand
from China. While Chile, Brazil, Canada, Australia and Argentina

(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: National Bureau of Statistics of China.

(3) Sources: Statistics Canada; Office for National Statistics (U.K.);
Eurostat.

(4) Source: Japan Cabinet Office.

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 13.

Semiannual Report | 3

GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets as of 2/28/05

[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]

Europe 50.4%
North America 16.6%
Asia 16.3%
Australia & New Zealand 3.2%
Latin America 1.4%
Middle East & Africa 0.7%
Short-Term Investments & Other Net Assets 11.4%

benefited from strong overall demand for natural resources, Mexico and other
oil-exporting countries benefited specifically from high oil prices.

Investors' major concerns during the six months were rising energy costs (oil
prices reached a high of $56 in October 2004) and the large U.S. budget and
current account deficits.(5) Offsetting this, relatively low inflation and
short-term interest rates supported global stock market levels, despite recent
rate increases by the U.S. Federal Reserve Board and other central banks. An
additional factor was the large number of companies that returned cash to
shareholders during the period through rising dividends and share repurchases.

During the six-month period under review, the MSCI AC World Index's six-month
total return was 16.21% and the MSCI Emerging Markets Index's was 35.36%, in
U.S. dollars.(6) In local currencies, their respective total returns were 11.96%
and 23.89%.(6) For most of the period, the majority of the world's currencies
strengthened in relation to the U.S. dollar. However, the U.S. dollar's
protracted decline versus these currencies reversed course in January 2005, as
the dollar appreciated. Still, the currency effect benefited U.S.-based
investors who invested in non-U.S. equities from developed and emerging market
countries, as local currency returns were boosted when translated into a weaker
U.S. dollar.

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

During the six months under review, the Fund's outperformance versus the
benchmark MSCI AC World Index was driven largely by our stock selection and
overweighted positions relative to the benchmark in the industrials,

(5) Source: U.S. Department of Energy.

(6) Source: Standard & Poor's Micropal. See footnote 1 for a description of
the MSCI AC World Index. The MSCI Emerging Markets Index is a free
float-adjusted, market capitalization-weighted index designed to measure
equity market performance in global emerging markets.

4 | Semiannual Report

materials and utilities sectors.(7) Our investments in consumer discretionary,
health care and financial stocks also outpaced those within the benchmark
index.(8) Among the Fund's best-performing individual stocks were LG Electronics
(+65%), BHP Billiton (+60%), Kidde (+52%), Nordea Bank (+38%), Volvo (+35%) and
Iberdrola (+31%).

It is also important to recognize the effect of currency movements on the Fund's
performance. In general, if the value of the U.S. dollar goes up compared with a
foreign currency, an investment traded in that foreign currency will go down in
value because it will be worth fewer U.S. dollars. This can have a negative
effect on Fund performance. Conversely, when the U.S. dollar weakens in relation
to a foreign currency, an investment traded in that foreign currency will
increase in value, which can contribute to Fund performance. For the six months
ended February 28, 2005, the U.S. dollar declined in value relative to most
non-U.S. currencies. The Fund's performance was positively affected by the
portfolio's primary investment in securities with non-U.S. currency exposure due
to the U.S. dollar's decrease in value during the period. However, one cannot
expect the same result in future periods.

Despite the Fund's solid returns, there were some disappointments. For example,
poor stock selection among some of our transportation- and media-related stocks
hindered relative performance. Fund holdings that detracted from performance
included media companies such as DIRECTV and News Corp., and transportation
companies such as East Japan Railway and AMR.

Portfolio activity was fairly modest during the past six months. On the buy
side, we initiated positions in Compass Group, a U.K.-based global foodservice
provider, and Compal Electronics, a Taiwanese producer of laptop computers and
electrical devices. We also added to our existing holdings of AMVESCAP, a
U.K.-based mutual fund company; Japanese drug maker Takeda Pharmaceutical; and
Switzerland-based Nestle, a leading global food products company.

On the sell side, we eliminated our holdings of Cia de Telecommunicaciones de
Chile because we felt the longer-term fundamental outlook had worsened

(7) In the SOI, the industrials sector comprises aerospace and defense, air
freight and logistics, airlines, commercial services and supplies,
electrical equipment, industrial conglomerates, machinery, and road and
rail; the materials sector comprises chemicals, construction materials,
metals and mining, and paper and forest products; and the utilities sector
comprises electrical utilities, and multi-utilities and unregulated power.

(8) In the SOI, the consumer discretionary sector comprises auto components;
automobiles; hotels, restaurants and leisure; household durables; media;
multiline retail and specialty retail; while the health care sector
comprises health care equipment and supplies, health care providers and
services, and pharmaceuticals; and the financial sector comprises capital
markets, commercial banks, diversified financial services, insurance and
real estate.

TOP 10 SECTORS/INDUSTRIES
2/28/05

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% OF TOTAL
NET ASSETS
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Insurance 6.9%
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Oil & Gas 6.8%
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Diversified Telecommunication Services 6.7%
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Pharmaceuticals 6.5%
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Commercial Banks 6.1%
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Health Care Providers & Services 3.9%
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Household Durables 3.5%
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Media 3.5%
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Food Products 3.3%
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Machinery 3.1%
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TOP 10 EQUITY HOLDINGS
2/28/05

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COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
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Samsung Electronics Co. Ltd. 2.3%
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT, SOUTH KOREA
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Shell Transport & Trading Co. PLC, ADR 1.9%
OIL & GAS, U.K.
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Telefonica SA 1.6%
DIVERSIFIED TELECOMMUNICATION
SERVICES, SPAIN
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E.ON AG 1.5%
ELECTRIC UTILITIES, GERMANY
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Sanofi-Aventis 1.4%
PHARMACEUTICALS, FRANCE
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Michelin SA, B 1.3%
AUTO COMPONENTS, FRANCE
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Volvo AB, B 1.2%
MACHINERY, SWEDEN
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Eni SpA 1.2%
OIL & GAS, ITALY
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Koninklijke Philips Electronics NV 1.2%
HOUSEHOLD DURABLES, NETHERLANDS
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Vodafone Group PLC 1.2%
WIRELESS TELECOMMUNICATION
SERVICES, U.K.
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Semiannual Report | 5

due to some corporate restructuring decisions, while WMC Resources and WPP Group
were sold as they reached our stock price objectives. We also reduced our
weightings in several materials and energy stocks, including BHP Billiton,
Alcan, Norsk Hydro and Husky Energy.

Thank you for your participation in Templeton Capital Accumulator Fund.

/s/ Gary P. Motyl
[PHOTO OMITTED]
Gary P. Motyl, CFA
Portfolio Manager
Templeton Capital Accumulator Fund

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF FEBRUARY 28, 2005, 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.

6 | Semiannual Report

Performance Summary as of 2/28/05

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 reinvestment of the Fund's dividends and
capital gain distributions, if any, and any unrealized gains or losses.

PRICE AND DISTRIBUTION INFORMATION

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CHANGE 2/28/05 8/31/04
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Net Asset Value (NAV) +$2.12 $13.88 $11.76
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DISTRIBUTIONS (9/1/04-2/28/05)
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Dividend Income $0.1167
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PERFORMANCE(1)

FUND RETURNS SHOWN IN THE FOLLOWING TABLE DO NOT INCLUDE THE EFFECT OF THE
SEPARATE SALES AND CREATION CHARGES ASSESSED THROUGH TEMPLETON CAPITAL
ACCUMULATION PLANS. IF THESE CHARGES WERE INCLUDED, THE FUND'S RETURNS WOULD
HAVE BEEN LOWER.

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FUND RETURNS 6-MONTH 1-YEAR 5-YEAR 10-YEAR INCEPTION (3/1/91)
- -----------------------------------------------------------------------------------------------------------------

Cumulative Total Return(2) 19.15% 14.38% 25.90% 170.29% 343.07%
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Average Annual Total Return(3) 19.15% 14.38% 4.71% 10.45% 11.22%
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Value of $10,000 Investment(4) $11,915 $11,438 $12,590 $27,029 $44,307
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Avg. Ann. Total Return (3/31/05)(5) -- 13.24% 3.68% 10.10% 11.01%
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PLAN RETURNS* 6-MONTH 1-YEAR 5-YEAR 10-YEAR INCEPTION (3/1/91)
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Average Annual Total Return* -40.43% -42.81% 2.53% 9.89% 11.06%**
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Avg. Ann. Total Return (3/31/05)(5) -43.24% -43.38% 1.51% 9.53% 10.73%***
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* Plan returns include the effects of the separate sales and creation
charges assessed through Templeton Capital Accumulation Plans' $50/month
15-year plan. Performance calculations are based upon an initial lump sum
investment, taking into account sales and creation charges applicable in
the first year and the effect of subsequent, systematic investments at net
asset value through the remainder of the applicable time period. They do
not reflect what investors would have earned had they made the actual
monthly investments over each time period. The rate of sales and creation
charges decreases over longer investment periods.

** Based on prorated sales charges from Fund inception through 2/28/05.

*** Based on prorated sales charges from Fund inception through 3/31/05.

PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU
MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY
DIFFER FROM FIGURES SHOWN. FOR MOST RECENT MONTH-END PERFORMANCE, CALL
1-800/632-2301.

For the first year of a Plan, sales and creation charges can amount to 50% of
the total amount invested during the year. Since shares of the Fund can only be
acquired through Templeton Capital Accumulation Plans, investors should read the
Plan prospectus for more complete information on the impact of the sales and
creation charges applicable to the Plan. Effective December 27, 2004, the Fund
was closed to new investors.

Semiannual Report | 7

Performance Summary (CONTINUED)

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) 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.

8 | Semiannual Report

Your Fund's Expenses

As a Fund shareholder, you can incur two types of costs:

o Transaction costs, including sales charges (loads) on Fund purchases and
redemption fees; and

o Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing
costs, sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help
you understand these costs and compare them with those of other mutual funds.
The table assumes a $1,000 investment held for the six months indicated.

ACTUAL FUND EXPENSES

The first line (Actual) for each share class listed in the table below provides
actual account values and expenses. The "Ending Account Value" is derived from
the Fund's actual return, which includes the effect of Fund expenses.

You can estimate the expenses you paid during the period, by following these
steps. OF COURSE, YOUR ACCOUNT VALUE AND EXPENSES WILL DIFFER FROM THOSE IN THIS
ILLUSTRATION:

1. Divide your account value by $1,000.

IF AN ACCOUNT HAD AN $8,600 VALUE, THEN $8,600 / $1,000 = 8.6.

2. Multiply the result by the number under the heading "Expenses Paid During
Period."

IF EXPENSES PAID DURING PERIOD WERE $7.50, THEN 8.6 X $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

HYPOTHETICAL EXAMPLE FOR COMPARISON WITH OTHER FUNDS

Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical "Ending
Account Value" is based on the actual expense ratio for each class and an
assumed 5% annual rate of return before expenses, which does not represent the
Fund's actual return. The figure under the heading "Expenses Paid During Period"
shows the hypothetical expenses your account would have incurred under this
scenario. You can compare this figure with the 5% hypothetical examples that
appear in shareholder reports of other funds.

Semiannual Report | 9

Your Fund's Expenses (CONTINUED)

PLEASE NOTE THAT EXPENSES SHOWN IN THE TABLE ARE MEANT TO HIGHLIGHT ONGOING
COSTS AND DO NOT REFLECT ANY TRANSACTION COSTS, SUCH AS SALES CHARGES OR
REDEMPTION FEES. Therefore, the second line for each class is useful in
comparing ongoing costs only, and will not help you compare total costs of
owning different funds. In addition, if transaction costs were included, your
total costs would have been higher. Please refer to the Fund prospectus for
additional information on operating expenses.

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BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
VALUE 8/31/04 VALUE 2/28/05 PERIOD* 8/31/04-2/28/05
- -----------------------------------------------------------------------------------------------------------

Actual $1,000 $1,191.50 $5.98
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Hypothetical (5% return before expenses) $1,000 $1,019.34 $5.51
- -----------------------------------------------------------------------------------------------------------

* Expenses are equal to the annualized expense ratio of 1.10% multiplied by
the average account value over the period, multiplied by 181/365 to
reflect the one-half year period.

10 | Semiannual Report

Important Notice to Shareholders

PROPOSED REORGANIZATION

On December 4, 2004, the Board of Trustees of the Fund approved a proposal
providing for the reorganization of the Fund into Templeton Growth Fund, Inc.
("Templeton Growth Fund"), a registered open-end management investment company.
The proposed reorganization involves Templeton Growth Fund's acquisition of
substantially all of the Fund's assets in exchange solely for Class A shares of
Templeton Growth Fund and the distribution of the Class A shares of Templeton
Growth Fund to shareholders of the Fund as a part of the complete liquidation
and dissolution of the Fund. This transaction, which is expected to be tax-free,
is subject to the approval of the shareholders of the Fund, and, if approved,
shares will be exchanged based on the respective net asset values of the Fund
and Class A shares of Templeton Growth Fund. The Fund's Board of Trustees plans
to submit the proposed reorganization to shareholders at a Special Meeting of
Shareholders currently scheduled for May 5, 2005. Any solicitation of proxies by
the Fund in connection with its Special Meeting of Shareholders will be made
only pursuant to separate proxy materials filed under federal securities laws.
These materials were available beginning in February 2005. There can be no
assurances that Fund shareholders will vote in favor of the proposed
reorganization. In connection with the proposed reorganization transaction, the
Fund and Templeton Growth Fund filed relevant materials with the U.S. Securities
and Exchange Commission ("SEC"), including a Form N-14 combined proxy statement
for the Fund and registration statement for Templeton Growth Fund that contains
a prospectus. Because those documents contain important information,
shareholders are urged to read them. They are available at the SEC's website,
sec.gov. Shareholders can also obtain copies of these documents and other
transaction-related documents for free by calling 1-800/334-7056.

Semiannual Report | 11

Templeton Capital Accumulator Fund

FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 28, 2005 YEAR ENDED AUGUST 31,
(UNAUDITED) 2004 2003 2002 2001 2000
--------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............ $ 11.76 $ 10.18 $ 9.29 $ 10.85 $ 13.34 $ 12.11
--------------------------------------------------------------------------------
Income from investment operations:

Net investment income(a) ....................... .04 .12 .12 .12 .16 .16

Net realized and unrealized gains (losses) ..... 2.20 1.57 .87 (1.57) (1.45) 1.71
--------------------------------------------------------------------------------
Total from investment operations ................ 2.24 1.69 .99 (1.45) (1.29) 1.87
--------------------------------------------------------------------------------
Less distributions from:

Net investment income .......................... (.12) (.11) (.10) (.11) (.16) (.15)

Net realized gains ............................. -- -- -- -- (1.04) (.49)
--------------------------------------------------------------------------------
Total distributions ............................. (.12) (.11) (.10) (.11) (1.20) (.64)
--------------------------------------------------------------------------------
Net asset value, end of period .................. $ 13.88 $ 11.76 $ 10.18 $ 9.29 $ 10.85 $ 13.34
================================================================================

Total return(b) ................................. 19.15% 16.72% 10.86% (13.38)% (9.96)% 16.44%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ............... $740,556 $596,015 $457,645 $354,042 $364,236 $370,029

Ratios to average net assets:

Expenses ....................................... 1.10%(c) 1.21% 1.12% 1.11% 1.05% 1.03%

Net investment income .......................... .55%(c) 1.04% 1.35% 1.13% 1.35% 1.24%

Portfolio turnover rate ......................... 2.46% 12.93% 21.32% 14.28% 22.37% 32.13%

(a) Based on average daily shares outstanding.

(b) Total return is not annualized for periods less than one year.

12 | See notes to financial statements. | Semiannual Report

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED)

- --------------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------------

COMMON STOCKS 88.6%
AUSTRALIA 3.2%
Alumina Ltd. ....................................... Metals & Mining 1,054,060 $ 5,037,434
AMP Ltd. ........................................... Insurance 1,126,860 6,537,440
National Australia Bank Ltd. ....................... Commercial Banks 362,220 8,267,831
Qantas Airways Ltd. ................................ Airlines 1,276,080 3,671,227
------------
23,513,932
------------
BERMUDA 1.3%
ACE Ltd. ........................................... Insurance 137,470 6,111,916
XL Capital Ltd., A ................................. Insurance 50,300 3,772,500
------------
9,884,416
------------
BRAZIL .6%
Embraer-Empresa Brasileira de Aeronautica SA,
ADR ............................................... Aerospace & Defense 125,985 4,253,253
------------
CANADA 2.8%
Alcan Inc. ......................................... Metals & Mining 134,700 5,383,959
BCE Inc. ........................................... Diversified Telecommunication Services 325,460 7,588,480
(a)Celestica Inc. ..................................... Electronic Equipment & Instruments 204,530 2,620,797
Husky Energy Inc. .................................. Oil & Gas 166,670 4,841,749
(a)Novelis Inc. ....................................... Metals & Mining 26,940 633,629
------------
21,068,614
------------
CHINA .9%
(a)BYD Co. Ltd., H .................................... Electrical Equipment 923,000 2,828,548
China Mobile (Hong Kong) Ltd. ...................... Wireless Telecommunication Services 1,230,500 4,015,441
------------
6,843,989
------------
DENMARK .3%
(a)Vestas Wind Systems AS ............................. Electrical Equipment 124,170 1,656,646
(a)Vestas Wind Systems AS, 144A ....................... Electrical Equipment 41,390 552,215
------------
2,208,861
------------
FINLAND .7%
Stora Enso OYJ, R (EUR/FIM Traded) ................. Paper & Forest Products 203,900 3,106,536
Stora Enso OYJ, R (SEK Traded) ..................... Paper & Forest Products 145,997 2,219,513
------------
5,326,049
------------
FRANCE 5.5%
Accor SA ........................................... Hotels Restaurants & Leisure 61,110 2,863,949
AXA SA ............................................. Insurance 210,901 5,672,325
Michelin SA, B ..................................... Auto Components 137,430 9,809,409
Sanofi-Aventis ..................................... Pharmaceuticals 130,141 10,409,350
Suez SA ............................................ Multi-Utilities & Unregulated Power 201,170 5,447,899
Total SA, B ........................................ Oil & Gas 26,062 6,188,146
------------
40,391,078
------------

Semiannual Report | 13

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
GERMANY 6.1%
BASF AG ............................................ Chemicals 80,690 $ 6,016,969
Bayer AG, Br. ...................................... Chemicals 111,770 3,892,723
Celesio AG ......................................... Health Care Providers & Services 105,466 7,960,858
Deutsche Post AG ................................... Air Freight & Logistics 335,080 8,040,429
E.ON AG ............................................ Electric Utilities 119,990 10,768,496
Muenchener Rueckversicherungs-Gesellschaft ......... Insurance 18,960 2,327,505
Muenchener Rueckversicherungs-Gesellschaft,
144A .............................................. Insurance 5,417 664,984
Volkswagen AG ...................................... Automobiles 107,970 5,326,009
------------
44,997,973
------------
HONG KONG 1.1%
Cheung Kong Holdings Ltd. .......................... Real Estate 436,000 4,150,943
Hutchison Whampoa Ltd. ............................. Industrial Conglomerates 247,650 2,238,676
Swire Pacific Ltd., A .............................. Industrial Conglomerates 190,000 1,553,094
Swire Pacific Ltd., B .............................. Industrial Conglomerates 112,500 168,773
------------
8,111,486
------------
INDIA 1.4%
ICICI Bank Ltd. .................................... Commercial Banks 325,519 2,840,412
ICICI Bank Ltd., ADR ............................... Commercial Banks 80,185 1,816,190
Satyam Computers Services Ltd. ..................... IT Services 394,520 3,719,166
Satyam Computers Services Ltd., ADR ................ IT Services 71,700 1,748,763
------------
10,124,531
------------
ISRAEL .7%
(a)Check Point Software Technologies Ltd. ............. Software 234,490 5,189,264
------------
ITALY 1.7%
Eni SpA ............................................ Oil & Gas 339,760 8,863,617
Riunione Adriatica di Sicurta SpA .................. Insurance 177,381 4,115,416
------------
12,979,033
------------
JAPAN 6.5%
East Japan Railway Co. ............................. Road & Rail 581 3,095,480
Hitachi Ltd. ....................................... Electronic Equipment & Instruments 955,000 6,056,387
Komatsu Ltd. ....................................... Machinery 682,000 5,114,429
NEC Corp. .......................................... Computers & Peripherals 447,000 2,903,180
Nintendo Co. Ltd. .................................. Software 32,000 3,550,624
Nippon Telegraph & Telephone Corp. ................. Diversified Telecommunication Services 1,118 4,844,364
Nomura Holdings Inc. ............................... Capital Markets 206,000 2,843,350
Seiko Epson Corp. .................................. Computers & Peripherals 117,500 4,630,542
Sompo Japan Insurance Inc. ......................... Insurance 682,000 7,241,092
Sony Corp. ......................................... Household Durables 109,900 4,194,376
Takeda Pharmaceutical Co. Ltd. ..................... Pharmaceuticals 73,800 3,536,640
------------
48,010,464
------------
MEXICO .8%
Telefonos de Mexico SA de CV (Telmex), L,
ADR ............................................... Diversified Telecommunication Services 151,360 5,934,826
------------

14 | Semiannual Report

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
NETHERLANDS 3.4%
IHC Caland NV ...................................... Energy Equipment & Services 80,950 $ 5,370,653
ING Groep NV ....................................... Diversified Financial Services 271,600 8,362,291
Koninklijke Philips Electronics NV ................. Household Durables 317,267 8,776,793
Wolters Kluwer NV .................................. Media 150,890 2,917,332
------------
25,427,069
------------
NORWAY 1.1%
Norsk Hydro ASA .................................... Oil & Gas 59,710 5,172,860
Norske Skogindustrier ASA, A ....................... Paper & Forest Products 145,300 3,088,453
------------
8,261,313
------------
PORTUGAL .9%
Portugal Telecom SGPS SA ........................... Diversified Telecommunication Services 553,710 6,723,946
------------
SINGAPORE .6%
DBS Group Holdings Ltd. ............................ Commercial Banks 484,900 4,454,109
------------
SOUTH KOREA 4.9%
Kookmin Bank ....................................... Commercial Banks 110,304 5,095,177
Korea Electric Power Corp. ......................... Electric Utilities 101,110 2,768,069
KT Corp., ADR ...................................... Diversified Telecommunication Services 140,600 3,263,326
LG Electronics Inc. ................................ Household Durables 104,610 8,227,168
Samsung Electronics Co. Ltd. ....................... Semiconductors & Semiconductor Equipment 32,810 17,213,409
------------
36,567,149
------------
SPAIN 4.5%
Banco Santander Central Hispano SA ................. Commercial Banks 685,240 8,493,586
Endesa SA .......................................... Electric Utilities 82,930 1,876,836
Iberdrola SA, Br. .................................. Electric Utilities 225,770 5,955,635
Repsol YPF SA ...................................... Oil & Gas 191,120 5,203,574
Telefonica SA ...................................... Diversified Telecommunication Services 656,090 12,076,769
------------
33,606,400
------------
SWEDEN 5.4%
Atlas Copco AB, A .................................. Machinery 169,810 8,464,436
Electrolux AB, B ................................... Household Durables 208,170 5,005,696
Foreningssparbanken AB, A .......................... Commercial Banks 159,350 3,936,581
Nordea Bank AB, FDR ................................ Commercial Banks 684,060 7,228,857
Securitas AB, B .................................... Commercial Services & Supplies 379,700 6,049,890
Volvo AB, B ........................................ Machinery 198,470 9,124,224
------------
39,809,684
------------
SWITZERLAND 3.2%
Adecco SA .......................................... Commercial Services & Supplies 81,100 4,430,874
Lonza Group AG ..................................... Chemicals 70,850 4,426,028
Nestle SA .......................................... Food Products 31,090 8,633,508
Swiss Reinsurance Co. .............................. Insurance 88,990 6,532,395
------------
24,022,805
------------

Semiannual Report | 15

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
TAIWAN .9%
Chunghwa Telecom Co. Ltd., ADR ..................... Diversified Telecommunication Services 152,310 $ 3,320,358
Compal Electronics Inc., 144A ...................... Computers & Peripherals 502,460 2,487,177
Compal Electronics Inc., GDR, Reg S ................ Computers & Peripherals 132,000 653,400
------------
6,460,935
------------
UNITED KINGDOM 17.6%
Alliance Unichem ................................... Health Care Providers & Services 333,080 4,657,409
AMVESCAP PLC ....................................... Capital Markets 777,152 5,093,581
BAE Systems PLC .................................... Aerospace & Defense 1,017,850 5,008,257
BHP Billiton PLC ................................... Metals & Mining 397,764 5,936,491
BP PLC ............................................. Oil & Gas 586,250 6,332,600
Brambles Industries PLC ............................ Commercial Services & Supplies 878,378 5,149,252
(a)British Airways PLC ................................ Airlines 835,990 4,298,211
British Sky Broadcasting Group PLC ................. Media 640,000 6,968,555
Cadbury Schweppes PLC .............................. Food Products 574,410 5,641,645
Compass Group PLC .................................. Hotels Restaurants & Leisure 1,299,250 6,255,519
GlaxoSmithKline PLC ................................ Pharmaceuticals 358,150 8,556,555
Hanson PLC ......................................... Construction Materials 495,621 4,813,034
Kidde PLC .......................................... Electrical Equipment 1,340,880 4,284,641
National Grid Transco PLC .......................... Multi-Utilities & Unregulated Power 562,790 5,459,911
Pearson PLC ........................................ Media 472,140 5,789,677
(a)Rolls-Royce Group PLC .............................. Aerospace & Defense 1,117,630 5,585,143
Shell Transport & Trading Co. PLC, ADR ............. Oil & Gas 242,900 13,774,859
Shire Pharmaceuticals Group PLC .................... Pharmaceuticals 373,550 4,164,277
Smiths Group PLC ................................... Industrial Conglomerates 253,380 4,159,040
Standard Chartered PLC ............................. Commercial Banks 185,080 3,395,457
Unilever PLC ....................................... Food Products 631,940 6,045,747
Vodafone Group PLC ................................. Wireless Telecommunication Services 3,346,670 8,764,200
------------
130,134,061
------------
UNITED STATES 12.5%
Abbott Laboratories ................................ Pharmaceuticals 167,650 7,710,223
American International Group Inc. .................. Insurance 72,920 4,871,056
AmerisourceBergen Corp. ............................ Health Care Providers & Services 78,610 4,708,739
(a)AMR Corp. .......................................... Airlines 424,060 3,600,269
(a)BMC Software Inc. .................................. Software 165,810 2,478,859
Bristol-Myers Squibb Co. ........................... Pharmaceuticals 143,620 3,594,809
CIGNA Corp. ........................................ Health Care Providers & Services 53,200 4,830,560
(a)DIRECTV Group Inc. ................................. Media 390,840 5,866,508
Electronic Data Systems Corp. ...................... IT Services 2,240 47,712
(a)Hospira Inc. ....................................... Health Care Equipment & Supplies 16,765 496,244
International Paper Co. ............................ Paper & Forest Products 121,830 4,550,350
Kraft Foods Inc., A ................................ Food Products 122,940 4,112,343
(a)Maxtor Corp. ....................................... Computers & Peripherals 261,960 1,451,258
Mylan Laboratories Inc. ............................ Pharmaceuticals 377,220 6,639,072
(a)News Corp. Ltd., A ................................. Media 255,030 4,243,699
Officemax Inc. ..................................... Specialty Retail 120,710 3,810,815
Pfizer Inc. ........................................ Pharmaceuticals 141,342 3,715,881

16 | Semiannual Report

Templeton Capital Accumulator Fund

STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
UNITED STATES (CONT.)
SBC Communications Inc. ............................ Diversified Telecommunication Services 229,350 $ 5,515,868
(a)Synopsys Inc. ...................................... Software 103,940 1,881,314
Target Corp. ....................................... Multiline Retail 118,990 6,047,072
(a)Tenet Healthcare Corp. ............................. Health Care Providers & Services 604,970 6,600,223
(a)Western Digital Corp. .............................. Computers & Peripherals 226,410 2,549,377
Willis Group Holdings Ltd. ......................... Insurance 75,990 3,005,405
------------
92,327,656
------------
TOTAL COMMON STOCKS (COST $455,210,547) ............ 656,632,896
------------
SHORT TERM INVESTMENTS (COST $80,492,680) 10.9%
(b)Franklin Institutional Fiduciary Trust Money Market
Portfolio ........................................ 80,492,680 80,492,680
------------
TOTAL INVESTMENTS (COST $535,703,227) 99.5% ........ 737,125,576
OTHER ASSETS, LESS LIABILITIES .5% ................. 3,430,002
------------
NET ASSETS 100.0% .................................. $740,555,578
============

PORTFOLIO ABBREVIATIONS:

ADR - American Depository Receipt
FDR - Foreign Depository Receipt
GDR - Global Depository Receipt

CURRENCY ABBREVIATIONS:

EUR - Euro
FIM - Finnish Markka
SEK - Swedish Krona

(a) Non-income producing.

(b) See Note 7 regarding investments in Franklin Institutional Fiduciary Trust
Money Market Portfolio.

Semiannual Report | See notes to financial statements. | 17

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
February 28, 2005 (unaudited)

Assets:
Investments in securities:
Cost - Unaffiliated issuers ................................... $455,210,547
Cost - Sweep Money Fund (Note 7) .............................. 80,492,680
------------
Total cost of investments ..................................... $535,703,227
============
Value - Unaffiliated issuers .................................. $656,632,896
Value - Sweep Money Fund (Note 7) ............................. 80,492,680
------------
Total value of investments .................................... 737,125,576
Foreign currency, at value (cost $3,950) ....................... 4,303
Receivables:
Investment securities sold .................................... 3,033,046
Capital shares sold ........................................... 108,625
Dividends and interest ........................................ 1,454,422
Affiliates (Note 8) ........................................... 12,346
------------
Total assets ............................................ 741,738,318
------------
Liabilities:
Payables:
Capital shares redeemed ....................................... 305,422
Affiliates .................................................... 737,048
Funds advanced by custodian .................................... 63,689
Other liabilities .............................................. 76,581
------------
Total liabilities ....................................... 1,182,740
------------
Net assets, at value .................................. $740,555,578
============
Net assets consist of:
Undistributed net investment income ............................ $ 925,948
Net unrealized appreciation (depreciation) ..................... 201,478,323
Accumulated net realized gain (loss) ........................... 5,415,669
Capital shares ................................................. 532,735,638
------------
Net assets, at value .................................. $740,555,578
============
Shares outstanding .............................................. 53,339,147
============
Net asset value and maximum offering price per share ............ $ 13.88
============

18 | See notes to financial statements. | Semiannual Report

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended February 28, 2005 (unaudited)

Investment income:
Dividends (net of foreign taxes of $278,240)
Unaffiliated issuers ...................................................... $ 5,025,035
Sweep Money Fund (Note 7) ................................................. 501,279
Other income (Note 8) ..................................................... 12,346
------------
Total investment income ............................................... 5,538,660
------------
Expenses:
Management fees (Note 3) ................................................... 2,410,273
Administrative fees (Note 3) ............................................... 465,777
Distribution fees (Note 3) ................................................. 426,276
Transfer agent fees (Note 3) ............................................... 242,100
Custodian fees (Note 4) .................................................... 101,127
Reports to shareholders .................................................... 18,500
Trustees' fees and expenses ................................................ 8,600
Other ...................................................................... 2,000
------------
Total expenses ........................................................ 3,674,653
Expense reductions (Note 4) ........................................... (761)
------------
Net expenses ........................................................ 3,673,892
------------
Net investment income ............................................. 1,864,768
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments - Unaffiliated issuers ........................................ 16,317,376
Foreign currency transactions ............................................. (21,257)
------------
Net realized gain (loss) .............................................. 16,296,119
------------
Net change in unrealized appreciation (depreciation) on:
Investments ................................................................ 98,685,269
Translation of assets and liabilities denominated in foreign currencies .... 47,005
Deferred taxes ............................................................. 123,362
------------
Net change in unrealized appreciation (depreciation) .................. 98,855,636
------------
Net realized and unrealized gain (loss) ..................................... 115,151,755
------------
Net increase (decrease) in net assets resulting from operations ............. $117,016,523
============

Semiannual Report | See notes to financial statements. | 19

Templeton Capital Accumulator Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
for the six months ended February 28, 2005 (unaudited)
and the year ended August 31, 2004

----------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2005 AUGUST 31, 2004
----------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income ........................................................................ $ 1,864,768 $ 5,814,496
Net realized gain (loss) from investments and foreign currency transactions .................. 16,296,119 16,664,603
Net change in unrealized appreciation (depreciation) on investments, translation of assets
and liabilities denominated in foreign currencies, and deferred taxes ....................... 98,855,636 55,275,775
--------------------------------
Net increase (decrease) in net assets resulting from operations ........................... 117,016,523 77,754,874
--------------------------------
Distributions to shareholders from net investment income ...................................... (6,042,174) (5,087,057)
Capital share transactions (Note 2) ........................................................... 33,566,281 65,702,058
--------------------------------
Net increase (decrease) in net assets ..................................................... 144,540,630 138,369,875
Net assets:
Beginning of period ........................................................................... 596,014,948 457,645,073
--------------------------------
End of period ................................................................................. $ 740,555,578 $ 596,014,948
================================
Undistributed net investment income included in net assets:
End of period ................................................................................. $ 925,948 $ 5,103,354
================================

20 | See notes to financial statements. | Semiannual Report

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Capital Accumulator Fund (the 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 mainly in equity securities of companies of any
nation. The following summarizes the Fund's significant accounting policies.

On December 4, 2004, the Board of Trustees for the Templeton Capital Accumulator
Fund approved a proposal to merge Templeton Capital Accumulator Fund into the
Templeton Growth Fund, subject to approval by the shareholders of Templeton
Capital Accumulator Fund.

A. SECURITY VALUATION

Securities listed on a securities exchange or on the NASDAQ National Market
System are valued at the last quoted sale price or the official closing price of
the day, respectively. Over-the-counter securities and listed securities for
which there is no reported sale are valued within the range of the most recent
quoted bid and ask prices. Securities that trade in multiple markets or on
multiple exchanges are valued according to the broadest and most representative
market. Investments in open-end mutual funds are valued at the closing net asset
value.

Foreign securities are valued as of the close of trading on the foreign stock
exchange on which the security is primarily traded, or the NYSE, whichever is
earlier. The value is then converted into its U.S. dollar equivalent at the
foreign exchange rate in effect at the close of the NYSE on the day that the
value of the foreign security is determined. If no sale is reported at that
time, the foreign security will be valued within the range of the most recent
quoted bid and ask prices.

The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Some methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Occasionally, events occur between the
time at which trading in a security is completed and the close of the NYSE that
might call into question the availability (including the reliability) of the
value of a portfolio security held by the Fund. If such an event occurs, the
securities may be valued using fair value procedures, which may include the use
of independent pricing services. All security valuation procedures are approved
by the Fund's Board of Trustees.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. Occasionally, events may impact the availability or reliability of foreign
exchange rates used to convert the U.S. dollar equivalent value. If such an
event occurs, the foreign exchange rate will be valued at fair value using
procedures established and approved by the Fund's Board of Trustees.

Semiannual Report | 21

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. FOREIGN CURRENCY TRANSLATION (CONTINUED)

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

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

C. FOREIGN CURRENCY CONTRACTS

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

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

D. INCOME AND DEFERRED TAXES

No provision has been made for U.S. income taxes because the Fund's policy is to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code and to distribute substantially all of its taxable income. Fund
distributions to shareholders are determined on an income tax basis and may
differ from net investment income and realized gains for financial reporting
purposes.

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 in an amount that would be payable
if the securities were disposed of on the valuation date.

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.

22 | Semiannual Report

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. ACCOUNTING ESTIMATES

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

G. REDEMPTION FEES

Effective June 1, 2004, redemptions and exchanges of Fund shares held five
trading days or less may be subject to the Fund's redemption fee, which is 2% of
the amount redeemed. Such fees are retained by the Fund and accounted for as
additional paid-in capital. There were no redemption fees for the period.

H. GUARANTEES AND INDEMNIFICATIONS

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

2. SHARES OF BENEFICIAL INTEREST

At February 28, 2005, there were an unlimited number of shares authorized
(without par value). Transactions in the Fund's shares were as follows:

----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2005 AUGUST 31, 2004
----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------

Shares sold ......................... 3,898,342 $ 49,973,289 7,671,485 $ 88,767,548
Shares issued in reinvestment of
distributions ...................... 486,067 5,970,928 472,305 5,019,603
Shares redeemed ..................... (1,720,050) (22,377,936) (2,407,696) (28,085,093)
----------------------------------------------------------------
Net increase (decrease) ............. 2,664,359 $ 33,566,281 5,736,094 $ 65,702,058
================================================================

Semiannual Report | 23

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:

- ----------------------------------------------------------------------------------------------
SUBSIDIARY AFFILIATION
- ----------------------------------------------------------------------------------------------

Templeton Investment Counsel LLC (TIC) Investment manager
Franklin Templeton Services LLC (FT Services) Administrative manager
Franklin Templeton Distributors Inc. (Distributors) Principal underwriter
Franklin Templeton Investor Services LLC (Investor Services) Transfer agent

A. MANAGEMENT FEE

The Fund pays an investment management fee to TIC based on the Fund's average
daily net assets as follows:

- --------------------------------------------------------------------------------
ANNUALIZED FEE RATE NET ASSETS
- --------------------------------------------------------------------------------
0.750% Up to and including $1 billion
0.730% Over $1 billion, up to and including $5 billion
0.710% Over $5 billion, up to and including $10 billion
0.690% Over $10 billion, up to and including $15 billion
0.670% Over $15 billion, up to and including $20 billion
0.650% Over $20 billion

B. ADMINISTRATIVE FEES

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% Up to and including $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

C. DISTRIBUTION FEES

The Fund reimburses Distributors up to 0.30% per year of its average daily net
assets for costs incurred in marketing the Fund's shares under a Rule 12b-1
plan.

Under the distribution plan, costs exceeding the maximum for the current plan
period may be reimbursed in subsequent periods. At February 28, 2005,
Distributors advised the Fund that unreimbursed costs were $821,718.

24 | Semiannual Report

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

D. SALES CHARGES/UNDERWRITING AGREEMENTS

Distributors has advised the Fund of the following commission transactions
related to the sales and redemptions of the Fund's shares for the period:

Net sales charges received ......................... $363,839

E. TRANSFER AGENT FEES

The Fund paid transfer agent fees of $242,100, of which $2,064 was paid to
Investor Services.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended February 28, 2005, the
custodian fees were reduced as noted in the Statement of Operations.

5. INCOME TAXES

At August 31, 2004, 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
2012 .............................................. 1,654,849
-----------
$10,829,730
===========

At August 31, 2004, the Fund had deferred currency losses occurring subsequent
to October 31, 2003 of $50,720. For tax purposes, such losses will be reflected
in the year ending August 31, 2005.

Net investment income and net realized gains differ for financial statements and
tax purposes primarily due to differing treatments of foreign currency
transactions.

At February 28, 2005, the net unrealized appreciation (depreciation) based on
the cost of investments for income tax purposes were as follows:

Cost of investments ................................ $535,703,227
============
Unrealized appreciation ............................ $216,793,231
Unrealized depreciation ............................ (15,370,882)
------------
Net unrealized appreciation (depreciation) ......... $201,422,349
============

Semiannual Report | 25

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term securities) for the
period ended February 28, 2005 aggregated $15,137,257 and $31,624,555,
respectively.

7. 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.

8. REGULATORY MATTERS

INVESTIGATIONS

As part of various investigations by a number of federal, state, and foreign
regulators and governmental entities, including the Securities and Exchange
Commission ("SEC"), the California Attorney General's Office ("CAGO"), and the
National Association of Securities Dealers, Inc. ("NASD"), relating to certain
practices in the mutual fund industry, including late trading, market timing and
marketing support payments to securities dealers who sell fund shares, Franklin
Resources, Inc. and certain of its subsidiaries (as used in this section,
together, the "Company"), as well as certain current or former executives and
employees of the Company, received subpoenas and/or requests for documents,
information and/or testimony. The Company and its current employees provided
documents and information in response to those requests and subpoenas.

SETTLEMENTS

Beginning in August 2004, the Company entered into settlements with certain
regulators investigating the mutual fund industry practices noted above. The
Company believes that settlement of each of the matters described in this
section is in the best interest of the Company and shareholders of the Franklin,
Templeton, and Mutual Series mutual funds (the "funds").

On August 2, 2004, Franklin Resources, Inc. announced that its subsidiary,
Franklin Advisers, Inc., reached an agreement with the SEC that resolved the
issues resulting from the SEC investigation into market timing activity. In
connection with that agreement, the SEC issued an "Order Instituting
Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and
203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the
Investment Company Act of 1940, Making Findings and Imposing Remedial Sanctions
and a Cease-and-Desist Order" (the "Order"). The SEC's Order concerned the
activities of a limited number of third parties that ended in 2000 and those
that were the subject of the first Massachusetts administrative complaint
described below.

26 | Semiannual Report

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

SETTLEMENTS (CONTINUED)

Under the terms of the SEC's Order, pursuant to which Franklin Advisers, Inc.
neither admitted nor denied any of the findings contained therein, Franklin
Advisers, Inc. agreed to pay $50 million, of which $20 million is a civil
penalty, to be distributed to shareholders of certain funds in accordance with a
plan to be developed by an independent distribution consultant. At this time, it
is unclear which funds or which shareholders of any particular fund will receive
distributions. The Order also required Franklin Advisers, Inc. to, among other
things, enhance and periodically review compliance policies and procedures.

On September 20, 2004, Franklin Resources, Inc. announced that two of its
subsidiaries, Franklin Advisers, Inc. and Franklin Templeton Alternative
Strategies, Inc. ("FTAS"), reached an agreement with the Securities Division of
the Office of the Secretary of the Commonwealth of Massachusetts (the "State of
Massachusetts") related to its administrative complaint filed on February 4,
2004, concerning one instance of market timing that was also a subject of the
August 2, 2004 settlement that Franklin Advisers, Inc. reached with the SEC, as
described above.

Under the terms of the settlement consent order issued by the State of
Massachusetts, Franklin Advisers, Inc. and FTAS consented to the entry of a
cease-and-desist order and agreed to pay a $5 million administrative fine to the
State of Massachusetts (the "Massachusetts Consent Order"). The Massachusetts
Consent Order included two different sections: "Statements of Fact" and
"Violations of Massachusetts Securities Laws." Franklin Advisers, Inc. and FTAS
admitted the facts in the Statements of Fact.

On October 25, 2004, the State of Massachusetts filed a second administrative
complaint, alleging that Franklin Resources, Inc.'s Form 8-K filing (in which it
described the Massachusetts Consent Order and stated that "Franklin did not
admit or deny engaging in any wrongdoing") failed to state that Franklin
Advisers, Inc. and FTAS admitted the Statements of Fact portion of the
Massachusetts Consent Order (the "Second Complaint"). Franklin Resources, Inc.
reached a second agreement with the State of Massachusetts on November 19, 2004,
resolving the Second Complaint. As a result of the November 19, 2004 settlement,
Franklin Resources, Inc. filed a new Form 8-K. The terms of the Massachusetts
Consent Order did not change and there was no monetary fine associated with this
second settlement.

On November 17, 2004, Franklin Resources, Inc. announced that Franklin Templeton
Distributors, Inc. ("FTDI") reached an agreement with the CAGO, resolving the
issues resulting from the CAGO's investigation concerning sales and marketing
support payments. Under the terms of the settlement, FTDI neither admitted nor
denied the allegations in the CAGO's complaint and agreed to pay $2 million to
the State of California as a civil penalty, $14 million to the funds, to be
allocated by an independent distribution consultant to be paid for by FTDI, and
$2 million to the CAGO for its investigative costs.

Semiannual Report | 27

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

SETTLEMENTS (CONTINUED)

On December 13, 2004, Franklin Resources, Inc. announced that its subsidiaries
FTDI and Franklin Advisers, Inc. reached an agreement with the SEC, resolving
the issues resulting from the SEC's investigation concerning marketing support
payments to securities dealers who sell fund shares. In connection with that
agreement, the SEC issued an "Order Instituting Administrative and
Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions
Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940,
Sections 9(b) and 9(f) of the Investment Company Act of 1940, and Section 15(b)
of the Securities Exchange Act of 1934" (the "Second Order").

Under the terms of the Second Order, in which FTDI and Franklin Advisers, Inc.
neither admitted nor denied the findings contained therein, they agreed to pay
the funds a penalty of $20 million and disgorgement of $1 (one dollar). FTDI and
Franklin Advisers, Inc. also agreed to implement certain measures and
undertakings relating to marketing support payments to broker-dealers for the
promotion or sale of fund shares, including making additional disclosures in the
funds' Prospectuses and Statements of Additional Information. The Second Order
further requires the appointment of an independent distribution consultant, at
the Company's expense, who shall develop a plan for the distribution of the
penalty and disgorgement to the funds.

The SEC's Second Order and the CAGO settlement agreement concerning marketing
support payments provide that the distribution of settlement monies are to be
made to the relevant funds, not to individual shareholders. The independent
distribution consultant has substantially completed preparation of these
distribution plans. The CAGO has approved the distribution plan pertaining to
the distribution of the monies owed under the CAGO settlement agreement and, in
accordance with the terms and conditions of that settlement, the monies were
disbursed to the participating funds and are recorded as other income in the
current period. The SEC has not yet approved the distribution plan pertaining to
the Second Order. When approved, disbursements of settlement monies under the
SEC's Second Order will be made promptly in accordance with the terms and
conditions of that order.

28 | Semiannual Report

Templeton Capital Accumulator Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

OTHER LEGAL PROCEEDINGS

The Fund, in addition to the Company and other funds, and certain current and
former officers, employees, and directors have been named in multiple lawsuits
in different federal courts in Nevada, California, Illinois, New York and
Florida, alleging violations of various federal securities laws and seeking,
among other relief, monetary damages, restitution, removal of fund trustees,
directors, advisers, administrators, and distributors, rescission of management
contracts and 12b-1 Plans, and/or attorneys' fees and costs. Specifically, the
lawsuits claim breach of duty with respect to alleged arrangements to permit
market timing and/or late trading activity, or breach of duty with respect to
the valuation of the portfolio securities of certain Templeton funds managed by
Franklin Resources, Inc. subsidiaries, resulting in alleged market timing
activity. The majority of these lawsuits duplicate, in whole or in part, the
allegations asserted in the February 4, 2004 Massachusetts administrative
complaint and the findings in the SEC's August 2, 2004 Order, as described
above. The lawsuits are styled as class actions or derivative actions on behalf
of either the named funds or Franklin Resources, Inc.

In addition, the Company, as well as certain current and former officers,
employees, and directors, have been named in multiple lawsuits alleging
violations of various securities laws and pendent state law claims relating to
the disclosure of directed brokerage payments and/or payment of allegedly
excessive advisory, commission, and distribution fees, and seeking, among other
relief, monetary damages, restitution, rescission of advisory contracts,
including recovery of all fees paid pursuant to those contracts, an accounting
of all monies paid to the named advisers, declaratory relief, injunctive relief,
and/or attorneys' fees and costs. These lawsuits are styled as class actions or
derivative actions brought on behalf of certain funds.

The Company and fund management strongly believe that the claims made in each of
the lawsuits identified above are without merit and intend to vigorously defend
against them. The Company cannot predict with certainty, however, the eventual
outcome of the remaining governmental investigations or private lawsuits, nor
whether they will have a material negative impact on the Company. Public trust
and confidence are critical to the Company's business and any material loss of
investor and/or client confidence could result in a significant decline in
assets under management by the Company, which would have an adverse effect on
the Company's future financial results. If the Company finds that it bears
responsibility for any unlawful or inappropriate conduct that caused losses to
the Fund, it is committed to making the Fund or its shareholders whole, as
appropriate. The Company is committed to taking all appropriate actions to
protect the interests of its funds' shareholders.

Semiannual Report | 29

Templeton Capital Accumulator Fund

SHAREHOLDER INFORMATION

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. Copies of the Fund's proxy voting records are also made available online
at franklintempleton.com and posted on the U.S. Securities and Exchange
Commission's website at sec.gov and reflect the most recent 12-month period
ended June 30.

QUARTERLY STATEMENT OF INVESTMENTS

The Fund files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800/SEC-0330.

30 | Semiannual Report

This page intentionally left blank.

Literature Request

LITERATURE REQUEST. TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT
1-800/DIAL BEN(R) (1-800/342-5236) OR VISIT FRANKLINTEMPLETON.COM. INVESTORS
SHOULD CAREFULLY CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES
BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE
CAREFULLY READ THE PROSPECTUS BEFORE INVESTING. To ensure the highest quality of
service, we may monitor, record and access telephone calls to or from our
service departments. These calls can be identified by the presence of a regular
beeping tone.

FRANKLIN TEMPLETON 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

Mutual Discovery 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

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 Technology Fund
Franklin Utilities Fund
Mutual Financial Services Fund

ASSET ALLOCATION

Franklin Templeton Corefolio
Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives 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(4)
Franklin's AGE High Income Fund
Franklin Floating Rate Daily Access Fund
Franklin Income Fund
Franklin Limited Maturity
U.S. Government Securities Fund(4),(5)
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund(4)
Templeton Global Bond Fund

TAX-FREE INCOME(6)

NATIONAL FUNDS

Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(7)

LIMITED-TERM FUNDS

California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS

California Intermediate-Term
Tax-Free Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
New York Intermediate-Term
Tax-Free Income Fund

STATE-SPECIFIC

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

INSURANCE FUNDS

Franklin Templeton Variable Insurance Products
Trust(9)

(1) The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.

(2) The fund is only open to existing shareholders and 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) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

(5) Formerly Franklin Short-Intermediate U.S. Government Securities Fund.
Effective 9/1/04, the fund's name changed; its investment goal and
strategy remained the same.

(6) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are
generally taxable.

(7) Portfolio of insured municipal securities.

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

(9) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

01/05 Not part of the semiannual report

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

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 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. The prospectus
contains this and other information; please read it carefully before investing.

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

TCAP S2005 04/05

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 11(a), the registrant is attaching as an exhibit a copy of
its code of ethics that applies to its principal executive officers and
principal financial and accounting officer.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

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

(2) The audit committee financial experts are Fred R. Millsaps and Frank A.
Olson, they are "independent" as defined under the relevant Securities and
Exchange Commission Rules and Releases.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

N/A

ITEM 6. SCHEDULE OF INVESTMENTS. N/A

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

N/A

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES AND AFFILIATED PURCHASES.

N/A

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

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

ITEM 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 11. EXHIBITS

(a) Code of Ethics

(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
Galen G. Vetter, 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
Galen G. Vetter, Chief Financial Officer

SIGNATURES

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

TEMPLETON CAPITAL ACCUMULATOR FUND

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date April 25, 2005

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 25, 2005

By /s/GALEN G. VETTER
Chief Financial Officer
Date April 25, 2005