UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06135

Templeton Institutional Funds

(Exact name of registrant as specified in charter)

300 S.E. 2^nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices)  (Zip code)

Alison Baur, 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: 12/31

Date of reporting period: 12/31/22

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

Annual

Report

Templeton

Institutional

Funds

December

31,

2022

Foreign

Smaller

Companies

Series

International

Equity

Series

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

ftinstitutional.com

Annual

Report

1

Contents

Annual

Report

Economic

and

Market

Overview

2

Foreign

Smaller

Companies

Series

3

International

Equity

Series

10

Financial

Highlights

and

Schedules

of

Investments

17

Financial

Statements

29

Notes

to

Financial

Statements

32

Report

of

Independent

Registered

Public

Accounting

Firm

45

Tax

Information

46

Board

Members

and

Officers

47

Shareholder

Information

52

Visit

ftinstitutional.com

for

fund

updates,

to

access

your

account,

or

to

find

investment

insights.

2

ftinstitutional.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

-18.36%

total

return

for

the

12

months

ended

December

31,

2022.

1

The

combination

of

resilient

consumer

demand

and

persistent

supply-chain

disruptions

contributed

to

higher

inflation

in

many

countries.

This

inflationary

pressure

led

many

of

the

world’s

central

banks

to

adopt

less

accommodative

monetary

policy

in

2022,

which

hindered

stocks

and

the

outlook

for

economic

growth.

Russia’s

invasion

of

Ukraine

and

the

subsequent

escalation

of

the

war

also

increased

investor

uncertainty,

as

international

sanctions

on

Russia

disrupted

global

trade

and

commodity

markets.

Meanwhile,

shifting

public

health

policy

in

China

added

volatility

to

the

global

economy,

as

lockdowns

early

in

the

period

to

quell

the

spread

of

the

Omicron

variant

of

COVID-19

slowed

economic

activity,

while

widespread

protests

late

in

the

period

led

the

government

to

relax

its

strict

“zero-COVID”

policy.

In

the

U.S.,

gross

domestic

product

(GDP)

expanded

in

the

second

half

of

the

calendar

year,

recovering

from

a

slight

contraction

in

the

first

half

of

the

year

when

high

inflation,

supply

constraints

and

record

trade

deficits

weighed

on

economic

output.

Rising

prices

precipitated

a

notable

decline

in

consumer

confidence

despite

high

spending

levels,

robust

job

growth

and

low

unemployment.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

in

March

2022

for

the

first

time

since

2018.

The

Fed

raised

the

federal

funds

rate

again

at

its

subsequent

six

meetings

to

end

the

period

at

a

range

of

4.25%–4.50%.

Furthermore,

the

Fed

said

it

would

continue

to

reduce

its

bond

holdings

and

anticipated

additional

interest-rate

increases

at

future

meetings

to

curtail

inflation.

Economic

growth

in

the

eurozone

decelerated

to

a

slightly

positive

growth

rate

during

the

year.

The

lifting

of

COVID-

related

restrictions

in

some

European

countries

and

the

summer

tourism

season

strengthened

economies.

However,

the

war

in

Ukraine

disrupted

supply

chains,

weakened

the

economic

outlook

and

contributed

to

record

high

inflation

across

the

eurozone,

as

energy

prices

soared.

Electricity

prices

hit

record

highs

in

Germany

and

France

as

coal

futures

and

natural

gas

prices

climbed.

Consequently,

the

European

Central

Bank

raised

interest

rates

in

July

2022

for

the

first

time

in

11

years

to

curtail

growing

inflation

and

raised

rates

in

three

subsequent

meetings.

In

this

environment,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

-15.06%

total

return

for

the

12

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-18.61%

total

return

for

the

12-month

period.

1

Growth

in

Japan

remained

slow,

alternating

between

positive

quarterly

GDP

growth

and

contraction.

China’s

economy

contracted

sharply

in

2022

as

COVID-related

restrictions

in

many

major

cities,

including

Shanghai,

weakened

consumer

demand.

Investor

concerns

about

the

solvency

of

several

large

property

developers

in

China

further

pressured

stocks

in

that

country.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-20.09%

total

return

for

the

12

months

under

review.

1

Central

bank

tightening,

the

threat

of

recession,

and

weakening

demand

for

semiconductors

in

technology-heavy

countries

contributed

to

the

downturn.

Following

Russia’s

invasion

of

Ukraine,

climbing

food

and

energy

prices

kindled

inflationary

pressures

and

raised

concerns

over

the

possibility

of

government

debt

defaults

in

some

countries.

However,

some

emerging

economies,

particularly

in

Latin

America,

as

well

as

South

Africa

and

Saudi

Arabia,

benefited

from

rising

commodity

prices.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

December

31,

2022.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

3

ftinstitutional.com

Annual

Report

Foreign

Smaller

Companies

Series

This

annual

report

for

Foreign

Smaller

Companies

Series

(Fund)

covers

the

fiscal

year

ended

December

3

1

,

2022

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

investments

of

smaller

companies

located

outside

the

U.S.,

including

emerging

markets.

For

purposes

of

this

80%

policy,

the

Fund

defines

smaller

companies

as

those

with

market

capitalizations

that

do

not

exceed

$4

billion.

However,

under

normal

conditions,

when

making

an

initial

purchase

of

securities

of

a

company,

we

will

only

invest

in

securities

of

companies

with

a

market

capitalization

of

not

more

than

$2

billion.

Once

a

security

qualifies

for

initial

purchase,

it

continues

to

qualify

for

additional

purchases

as

long

as

it

is

held

by

the

Fund,

provided

that

the

issuer’s

market

capitalization

does

not

exceed

$4

billion.

Performance

Overview

The

Fund

posted

a

-23.19%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Small

Cap

Index-NR,

which

measures

the

performance

of

global

developed

and

emerging

market

small-cap

equities

excluding

the

U.S.,

posted

a

-19.97%

cumulative

total

return.

1

Please

note,

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

the

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

6

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

apply

a

bottom-up,

value-oriented,

long-term

approach,

focusing

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.

We

also

consider

a

company’s

price/

earnings

ratio,

profit

margins

and

liquidation

value.

Manager’s

Discussion

In

a

challenging

macroeconomic

environment,

international

small

capitalization

equities,

as

represented

by

the

MSCI

ACWI

ex

USA

Small

Cap

Index-NR,

declined

-19.97%

for

the

12

months

ended

December

31,

2022.

1

Rising

inflation

forced

many

central

banks

to

tighten

monetary

policy,

leading

to

increasingly

dour

economic

expectations

and

major

rotations

in

global

capital

markets.

The

onset

and

escalation

of

war

in

Europe

saw

a

U.S.-led

NATO

(North

Atlantic

Treaty

Organization)

alliance

supporting

Ukraine

against

Russia,

while

growing

economic

tensions

between

China

and

the

West,

along

with

the

continued

disruptive

presence

of

COVID,

also

added

pressure

on

risk

assets

and

investor

sentiment

more

broadly.

Market

sentiment

improved

in

the

fourth

quarter

as

investors

began

pricing

in

signs

of

peak

inflation

and

less

aggressive

monetary

policy

tightening

by

many

central

banks

going

forward.

Against

this

backdrop,

the

Fund

underperformed

its

benchmark

index

for

the

year,

due

primarily

to

stock

selection

in

the

financials,

consumer

discretionary

and

industrials

sectors.

Sweden-based

Thule

Group,

which

focuses

on

consumer-

branded

products

in

the

outdoor

segment,

and

Watches

of

Switzerland

Group

(WOSG),

a

leading

U.K.

luxury

watch

retailer

with

a

growing

presence

in

the

U.S.,

detracted

from

relative

returns

in

the

consumer

discretionary

sector.

Geographic

Composition

12/31/22

%

of

Total

Net

Assets

Europe

47.2%

Asia

38.9%

North

America

4.6%

Latin

America

&

Caribbean

4.1%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

4.7%

1.

Source:

FactSet.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

18

.

Foreign

Smaller

Companies

Series

4

ftinstitutional.com

Annual

Report

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Schedule

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Shares

of

Thule

fell

on

investor

concerns

about

higher

interest

rates

and

their

impact

on

the

global

economy.

Looking

at

the

longer

term,

the

aging,

healthier

and

affluent

population

is

leading

to

an

increased

demand

for

outdoor

activities,

which

has

driven

strong

revenue

growth.

Additionally,

an

increase

in

domestic

holidays

and

“staycations”

on

the

back

of

COVID

may

be

supporting

demand.

The

company

has

proved,

in

our

view,

that

it

can

handle

rising

input

costs,

supply

shortages

and

elevated

demand

better

than

many

other

manufacturing

companies

in

the

Nordic

area.

Thule's

products

are

of

high

quality,

carry

premium

prices

and

are

highly

rated

in

open

consumer

reviews.

WOSG

shares

declined

on

slower

economic

growth

and

weakening

consumer

demand.

Looking

at

the

longer

term,

management

has

increased

digital

customer

engagement

activity

and

plans

to

extend

it

going

forward.

We

believe

WOSG

is

still

in

the

nascent

phase

of

its

development

despite

being

a

long-standing

market

leader

in

the

U.K.

We

see

meaningful

tailwinds

for

the

WOSG

equity

story

from

a

product

and

geographic

perspective.

Switzerland-based

Montana

Aerospace,

which

also

has

operations

in

Germany,

is

a

manufacturer

of

lightweight

critical

structural

parts

and

assemblies

made

of

various

hard

metals.

The

company

was

a

significant

relative

detractor

from

industrials

returns

as

it

was

impacted

by

rising

energy

costs,

which

led

to

analyst

downgrades.

We

believe

the

market

has

overreacted,

and

we

remain

confident

in

the

stock’s

long-term

potential.

Montana

Aerospace

is

vertically

integrated

across

the

entire

set

of

production

steps—

complete

from

raw

material

recycling,

casting,

extrusion,

machining,

surface

treatment

and

sub-assembly—with

many

steps

occurring

in

a

single

location.

This

vertical

integration

meaningfully

reduces

the

complexity

of

procurement

relative

to

the

traditional

model,

which

might

include

four

to

six

separate

sub-suppliers

for

a

single

part.

Montana

Aerospace

has

demonstrated

that

this

integrated

model

eliminates

dependencies

and

transport

costs

between

sub-suppliers

and

increases

flexibility

to

respond

to

changes.

Ultimately,

it

increases

reliability

and

lowers

supply-chain

risks

for

the

customer.

In

contrast,

relative

contributors

included

stock

selection

in

the

information

technology

(IT)

and

communication

services

sectors,

as

well

as

an

underweighting

in

the

real

estate

sector.

Shares

of

Barco,

a

Belgian

IT

company

that

focuses

on

projection,

medical

display

and

wireless

presentation

technology,

were

helped

by

a

reported

29%

year-on-year

increase

in

revenue

during

the

first

half

of

2022.

We

believe

a

projector

upgrade

wave

should

continue

to

drive

growth

in

the

cinema

business,

as

laser

technology

offers

total

cost

of

ownership

and

image-quality

benefits

over

the

old,

existing

xenon

lamp-based

projectors.

The

firm’s

“ClickShare”

product

is

a

runaway

success,

and

we

believe

it

has

clear

potential

for

further

growth.

Portfolio

Composition

12/31/22

%

of

Total

Net

Assets

Machinery

12.6%

Electronic

Equipment,

Instruments

&

Components

8.6%

Leisure

Products

7.4%

Textiles,

Apparel

&

Luxury

Goods

6.1%

Food

Products

5.5%

Capital

Markets

5.0%

Professional

Services

4.8%

Specialty

Retail

3.8%

Banks

3.1%

Entertainment

3.1%

Technology

Hardware,

Storage

&

Peripherals

2.7%

Life

Sciences

Tools

&

Services

2.7%

Pharmaceuticals

2.4%

Energy

Equipment

&

Services

2.4%

Other*

25.1%

Short-Term

Investments

&

Other

Net

Assets

4.7%

Top

10

Holdings

12/31/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Sanlorenzo

SpA

2.1%

Leisure

Products,

Italy

Asics

Corp.

2.0%

Textiles,

Apparel

&

Luxury

Goods,

Japan

Barco

NV

1.9%

Electronic

Equipment,

Instruments

&

Components,

Belgium

Interpump

Group

SpA

1.8%

Machinery,

Italy

Technogym

SpA

1.8%

Leisure

Products,

Italy

Meitec

Corp.

1.6%

Professional

Services,

Japan

Bucher

Industries

AG

1.6%

Machinery,

Switzerland

TechnoPro

Holdings,

Inc.

1.6%

Professional

Services,

Japan

Stabilus

SE

1.5%

Machinery,

Germany

Gerresheimer

AG

1.5%

Life

Sciences

Tools

&

Services,

Germany

Foreign

Smaller

Companies

Series

5

ftinstitutional.com

Annual

Report

M

Dias

Branco,

Brazil’s

market

leader

in

producing

cookies

and

crackers,

was

the

top

individual

stock

contributor

for

the

year.

We

believe

the

company’s

market-leading

brands

and

significant

competitive

advantages

it

has

developed

by

vertically

integrating

and

gradually

developing

distribution

across

Brazil

can

continue

to

support

strong

share-price

performance

over

our

long-term

investment

horizon.

Norway-based

TGS,

the

leading

provider

of

subsurface

data

for

the

oil

and

gas

exploration

industry,

was

another

strong

relative

contributor.

TGS

is

a

market

leader

with

a

unique

track

record

within

its

sector.

Over

its

history,

TGS

has

consistently

been

managed

predictably

and

methodically

through

cycles,

with

its

asset-light

model

allowing

it

to

nimbly

adjust

to

the

cycle.

TGS

entered

the

recent

downturn

with

a

net

cash

balance

sheet

and

responded

swiftly

by

cutting

its

operating

costs

and

capital

budget.

We

believe

its

favorable

financial

position

should

allow

it

to

opportunistically

acquire

assets

from

distressed

competitors.

Regionally,

stock

selection

in

Asia

ex

Japan

and

the

eurozone

detracted

from

relative

performance

for

the

year.

Stock

selection

and

an

underweighting

in

the

U.K.

contributed.

Thank

you

for

your

continued

participation

in

Foreign

Smaller

Companies

Series.

We

look

forward

to

serving

your

future

investment

needs.

Harlan

B.

Hodes

Lead

Portfolio

Manager

David

A.

Tuttle,

CFA

Kyle

Denning,

CFA

Katie

Ylijoki,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

2022,

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.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

December

31,

2022

Foreign

Smaller

Companies

Series

6

ftinstitutional.com

Annual

Report

The

performance

table

and

graph

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

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.

Performance

as

of

12/31/22

1

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563.

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

1-Year

-23.19%

-23.19%

5-Year

-7.31%

-1.51%

10-Year

+48.48%

+4.03%

See

page

8

for

Performance

Summary

footnotes.

Foreign

Smaller

Companies

Series

Performance

Summary

7

ftinstitutional.com

Annual

Report

See

page

8

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$1,000,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

12/31/12–12/31/22

Foreign

Smaller

Companies

Series

Performance

Summary

8

ftinstitutional.com

Annual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Small

and

midsized

and

relatively

new

or

unseasoned

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

large,

more

established

companies.

Historically,

these

securities

have

exhibited

greater

price

volatility

than

large-company

stocks,

particularly

over

the

short

term.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments.

Investments

in

emerging

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

smaller

size

and

lesser

liquidity.

Because

the

Fund

may

invest

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Political,

social

or

economic

disruptions

in

the

region,

even

in

countries

in

which

the

Fund

is

not

invested,

may

adversely

affect

the

value

of

securities

held

by

the

Fund.

The

manager’s

portfolio

selection

strategy

is

not

solely

based

on

ESG

considerations,

and

therefore

the

issuers

in

which

the

Fund

invests

may

not

be

considered

ESG-focused

companies.

Integrating

ESG

considerations

into

the

investment

process

is

not

a

guarantee

that

better

performance

will

be

achieved.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

The

total

annual

operating

expenses

are

as

of

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

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.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Source:

FactSet.

The

MSCI

ACWI

ex

USA

Small

Cap

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

performance

of

small-cap

equity

securities

in

global

developed

and

emerging

markets,

excluding

the

U.S.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

5.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(1/1/22–12/31/22)

Net

Investment

Income

Short-Term

Capital

Gain

Total

$0.3248

$0.0580

$0.3828

Total

Annual

Operating

Expenses

5

1.04%

Your

Fund’s

Expenses

Foreign

Smaller

Companies

Series

9

ftinstitutional.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

if

applicable,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

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

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value.”

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

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Beginning

Account

Value

7/1/22

Ending

Account

Value

12/31/22

Expenses

Paid

During

Period

7/1/22–12/31/22

1,2

Ending

Account

Value

12/31/22

Expenses

Paid

During

Period

7/1/22–12/31/22

1,2

a

Annualized

Expense

Ratio

2

$1,000

$1,010.60

$5.06

$1,020.17

$5.09

1.00%

10

ftinstitutional.com

Annual

Report

International

Equity

Series

This

annual

report

for

International

Equity

Series

(Fund)

covers

the

fiscal

year

ended

Decembe

r

3

1

,

2022

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

foreign

(non-U.S.)

equity

securities.

The

Fund

invests

predominantly

in

companies

located

outside

the

U.S.

including

companies

located

in

developing

market

countries.

Performance

Overview

The

Fund’s

Primary

shares

posted

a

-9.23%

cumulative

total

return

for

the

12

months

under

review.

For

comparison,

the

Fund’s

primary

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

which

measures

the

equity

market

performance

of

global

developed

and

emerging

markets

excluding

the

U.S.,

posted

a

-16.00%

cumulative

total

return.

1

Also

in

comparison,

the

Fund’s

secondary

benchmark,

the

MSCI

Europe,

Australasia,

Far

East

Index

(EAFE)-NR,

which

measures

the

equity

market

performance

of

global

developed

markets

excluding

the

U.S.

and

Canada,

posted

a

-14.45%

cumulative

total

return.

1

Please

note,

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

an

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

13

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563

.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

employ

a

bottom-up,

value-oriented,

long-term

approach,

focusing

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.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value.

We

attempt

to

identify

those

companies

that

offer

above-average

opportunities

for

capital

appreciation

in

various

countries

and

industries

where

economic

and

political

factors,

including

currency

movements,

are

favorable

to

capital

growth.

For

purposes

of

pursuing

the

Fund’s

investment

goal,

we

intend

to

enter

into

equity

derivative

instruments,

including

equity

index

futures

contracts.

We

use

these

derivative

instruments

for

investment

purposes,

including

for

cash

management

purposes

and

to

generate

income,

to

increase

liquidity

and/or

to

adjust

the

Fund’s

exposure

to

certain

equity

markets

in

a

more

efficient

or

less

expensive

way.

Manager’s

Discussion

The

Fund

outperformed

its

benchmark

MSCI

ACWI

ex

USA

Index-NR

in

2022,

a

challenging

year

that

saw

international

equities

post

their

biggest

decline

since

the

depths

of

the

global

financial

crisis

as

central

banks

tightened

policy

to

combat

rising

inflation.

All

major

regions

and

the

majority

of

the

Fund’s

sector

exposures

performed

better

than

the

benchmark

during

the

year

in

review.

Encouragingly,

relative

strength

was

primarily

attributable

to

stock

selection.

We

have

long

believed

that

the

ultra-loose

policy

environment

prevailing

in

recent

years

was

anomalous,

and

that

the

transition

to

a

more

normalized

interest-rate

environment

would

eventually

increase

investor

scrutiny

on

price

and

fundamentals,

potentially

rewarding

our

value-oriented

strategy.

As

it

happened,

international

value

stocks

had

their

best

year

relative

to

international

growth

stocks

since

the

bursting

of

the

TMT

(technology-media-telecommunication)

bubble

in

2000,

supporting

Fund

performance

during

the

12-month

review

period.

Energy

was

the

Fund’s

top-performing

sector

in

2022,

benefiting

from

both

stock

selection

and

a

favorable

overweighted

allocation.

The

Fund’s

top

three

individual

contributors

all

hailed

from

the

energy

sector:

French

integrated

oil

major

TotalEnergies

and

U.K.

oil

majors

BP

and

Shell.

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

25

.

Geographic

Composition

12/31/22

%

of

Total

Net

Assets

Europe

60.8%

Asia

27.0%

North

America

5.3%

Latin

America

&

Caribbean

1.9%

Short-Term

Investments

&

Other

Net

Assets

5.0%

International

Equity

Series

11

ftinstitutional.com

Annual

Report

Each

company

benefited

from

elevated

oil

prices,

strong

cash

flows

and

shareholder-friendly

capital

allocation

programs.

TotalEnergies

reported

better-than-expected

earnings

and

healthy

free

cash

flows,

which

management

used

to

buy

back

additional

shares

and

issue

a

special

dividend.

Concerns

about

Russia

are

keeping

the

pressure

on

valuations,

though

we

believe

TotalEnergies’

Russian

exposure

is

manageable

and

that

current

multiples

significantly

undervalue

the

firm’s

growth

potential

(aided

by

strong

positioning

in

liquified

natural

gas)

and

return

prospects.

BP

is

also

generating

prolific

cash,

which

management

is

using

to

buy

back

roughly

10%

of

its

outstanding

equity

per

year

at

current

rates,

after

paying

its

dividend

and

with

capital

left

over

to

continue

reducing

balance

sheet

leverage.

Management

delivered

another

exceptional

above-consensus

earnings

announcement

during

the

reporting

period,

and

we

remain

constructive

on

BP

given

the

above

characteristics

and

the

stock’s

single-

digit

price-to-earnings

multiple.

Shell,

which

is

traded

on

exchanges

in

the

U.K.

and

Netherlands,

was

also

buoyed

by

healthy

cash

generation

and

positive

capital

return

plans;

the

firm

reported

strong

profits,

raised

its

dividend

and

announced

plans

to

buy

back

another

$4

billion

of

shares

in

coming

months.

While

commodity

prices

will

fluctuate

in

the

near-term,

we

continue

to

believe

select

energy

producers

appear

significantly

undervalued

given

improved

capital

allocation

within

the

industry

and

attractive

supply-and-

demand

fundamentals

for

hydrocarbon

markets

over

the

longer-term.

Stock

selection

in

industrials

also

positively

impacted

performance,

led

by

U.K.-based

defense

contractor

BAE

Systems.

Defense

stocks

generally

had

a

good

year

in

light

of

the

escalating

conflict

in

Ukraine

and

simmering

geopolitical

tensions

elsewhere.

More

specifically,

shares

of

BAE

were

buoyed

by

positive

sentiment

and

improving

fundamentals.

A

trading

update

late

in

the

year

confirmed

the

strength

of

BAE’s

order

intake

in

2022

and

saw

management

reiterate

full-year

earnings

guidance

and

share

buyback

plans.

After

a

period

of

protracted

underperformance,

BAE

has

a

new

management

team

that

has

performed

admirably,

with

above-industry-average

growth

and

ongoing

improvements

in

operating

margins

and

cash

conversion.

While

we

trimmed

the

position

during

the

year

to

realize

profits,

we

continue

to

like

BAE

given

what

we

view

as

its

attractive

valuation,

strong

growth

profile,

good

margin

upside

and

favorable

capital

return

policies.

Other

notable

sector

contributors

included

financials,

information

technology

(IT)

and

communication

services,

all

of

which

benefited

from

stock

selection.

Financials

had

two

stocks

among

the

Fund’s

top

10

contributors:

Japanese

financial

services

firm

Sumitomo

Mitsui

Financial

Group

and

Singaporean

lender

United

Overseas

Bank.

We

raised

our

weighting

to

banks

last

year

on

expectations

that

rising

interest

rates

and

accelerating

loan

growth

would

strengthen

net

interest

margins,

which

is

playing

out

broadly

as

expected.

Our

exposures,

however,

remain

highly

selective.

We

have

avoided

banks

in

low-returning,

over-regulated

markets

with

elevated

credit

risk,

focusing

instead

on

what

we

believe

to

be

best-in-class

banks

in

attractive

markets

with

shareholder-friendly

management

teams

and

earnings

sensitivity

as

interest

rates

rise.

That

has

led

us

toward

“Main

Street”

banks

where

traditional

lending

will

benefit

from

higher

rates,

and

away

from

banks

with

a

high

mix

in

the

volatile

investment

banking

market.

Geographically,

we

are

finding

more

desirable

opportunities

that

fit

this

profile

in

the

U.K.

and

Asian

markets,

and

fewer

in

the

euro-area.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Schedule

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

From

the

communication

services

sector,

shares

of

German

incumbent

telecom

operator

Deutsche

Telekom

rallied

as

investors

favored

the

firm’s

quality

defensive

profile

during

a

period

of

market

consolidation.

As

the

leader

with

the

best

network

quality

in

one

of

the

most

attractive

markets

in

Europe—and

with

a

large

strategic

stake

in

well-positioned

U.S.

mobile

operator

T-Mobile

US

(not

a

Fund

holding)—we

believe

Deutsche

Telekom

offers

good

long-term

return

potential

from

current

modest

valuations.

Portfolio

Composition

12/31/22

%

of

Total

Net

Assets

Banks

14.4%

Oil,

Gas

&

Consumable

Fuels

13.8%

Pharmaceuticals

7.0%

Semiconductors

&

Semiconductor

Equipment

5.3%

Diversified

Telecommunication

Services

4.0%

Automobiles

3.5%

Metals

&

Mining

3.5%

Specialty

Retail

2.5%

Technology

Hardware,

Storage

&

Peripherals

2.4%

Multi-Utilities

2.2%

Aerospace

&

Defense

2.1%

Commercial

Services

&

Supplies

2.1%

Industrial

Conglomerates

2.0%

Electric

Utilities

2.0%

Other*

28.2%

Short-Term

Investments

&

Other

Net

Assets

5.0%

International

Equity

Series

12

ftinstitutional.com

Annual

Report

The

IT

sector

did

not

contribute

any

individual

stocks

to

the

Fund’s

top

10

performing

holdings,

though

our

position

limited

losses

relative

to

the

benchmark.

Turning

to

laggards,

stock-specific

weakness

in

utilities

was

the

main

detractor

during

the

period.

Shares

of

German

power

provider

E.ON

declined

on

concerns

about

the

impact

of

a

disruption

in

Russian

natural

gas

supply.

While

we

think

E.ON

could

be

a

strong

longer-term

holding

following

a

period

of

strategic

restructuring

and

deleveraging,

the

implications

of

the

Russia-Ukraine

conflict

for

Germany’s

power

system

change

the

risk-reward

calculus,

in

our

view.

We

liquidated

the

position

in

favor

of

opportunities

we

believe

are

more

attractive

and

with

more

manageable

near-

term

risk

profiles.

Health

care

stocks

also

detracted,

pressured

by

German

dialysis

specialist

Fresenius

Medical

Care.

Shares

declined

after

management

reported

weak

quarterly

sales

figures

and

cut

its

full-year

guidance,

citing

labor

shortages

and

rising

costs.

Near-term

volatility

aside,

we

believe

Fresenius

has

been

trading

near

trough

valuations

on

trough

earnings

and

should

benefit

from

improving

revenues

and

profit

margins

as

we

move

past

the

pandemic

(which

negatively

impacted

patient

volumes)

over

our

investment

horizon.

We

continue

to

like

Fresenius’s

positioning

in

the

dialysis

market,

where

the

firm

stands

to

benefit

from

its

popular

home

dialysis

offerings,

changes

in

U.S.

Medicare

laws,

intelligent

free

cash

flow

allocation,

and

optionality

around

partial

sales

or

potential

takeovers.

From

the

underperforming

consumer

discretionary

sector,

shares

of

German

athletic

apparel

firm

adidas

declined

during

the

year.

Adidas

continued

to

be

affected

by

the

COVID

lockdowns

in

China

and

was

also

impacted

by

the

competitive

selling

environment

in

all

geographies

due

to

elevated

inventory

levels

in

the

market.

Additionally,

controversies

forced

the

company

to

terminate

its

partnership

with

Yeezy

designer

Kanye

West.

As

the

brand

carried

significantly

higher-than-average

margins,

the

financial

loss

was

severe,

and

the

changing

circumstances

at

the

company

led

to

us

to

reconsider

our

investment

in

the

stock,

and

ultimately

exit

the

position.

From

a

regional

standpoint,

the

bulk

of

relative

outperformance

came

from

Europe,

where

the

Fund

benefited

primarily

from

stock

selection.

Within

the

region,

relative

outperformance

was

largely

concentrated

in

the

U.K.,

where

the

Fund’s

position

gained

over

7%,

compared

to

a

greater

than

6%

loss

for

the

benchmark’s

U.K.

exposures.

Asian

holdings

also

outperformed,

led

by

stock

selection

in

Japan

and

favorable

allocations

in

Singapore

(overweighted)

and

Taiwan

(underweighted).

In

August

2022,

Peter

A.

Nori

took

over

the

Lead

Portfolio

Manager

position

from

Antonio

T.

Docal,

who

is

no

longer

managing

the

Fund.

Thank

you

for

your

continued

participation

in

International

Equity

Series.

We

look

forward

to

serving

your

future

investment

needs.

Peter

A.

Nori,

CFA

Lead

Portfolio

Manager

Matthew

R.

Nagle,

CFA

Heather

Waddell,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

2022,

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.

Top

10

Holdings

12/31/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

TotalEnergies

SE

4.7%

Oil,

Gas

&

Consumable

Fuels,

France

BP

plc

4.5%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Shell

plc

4.5%

Oil,

Gas

&

Consumable

Fuels,

Netherlands

Deutsche

Telekom

AG

4.0%

Diversified

Telecommunication

Services,

Germany

Sumitomo

Mitsui

Financial

Group,

Inc.

3.9%

Banks,

Japan

Lloyds

Banking

Group

plc

2.7%

Banks,

United

Kingdom

Samsung

Electronics

Co.

Ltd.

2.4%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

AstraZeneca

plc

2.4%

Pharmaceuticals,

United

Kingdom

Veolia

Environnement

SA

2.2%

Multi-Utilities,

France

Sanofi

SA

2.2%

Pharmaceuticals,

France

Performance

Summary

as

of

December

31,

2022

International

Equity

Series

13

ftinstitutional.com

Annual

Report

The

performance

table

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

12/31/22

1,2

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

ftinstitutional.com

or

call

a

Franklin

Templeton

Institutional

Services

representative

at

(800)

321-8563

.

Share

Class

Cumulative

Total

Return

3

Average

Annual

Total

Return

4

–

Primary

1-Year

-9.23%

-9.23%

5-Year

-4.00%

-0.81%

10-Year

+29.60%

+2.63%

Service

1-Year

-9.29%

-9.29%

5-Year

-4.70%

-0.96%

10-Year

+27.66%

+2.47%

See

page

15

for

Performance

Summary

footnotes.

International

Equity

Series

Performance

Summary

14

ftinstitutional.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$1,000,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Primary

Shares

(12/31/12–12/31/22)

Service

Shares

(12/31/12–12/31/22)

International

Equity

Series

Performance

Summary

15

ftinstitutional.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Foreign

investing

involves

special

risks,

including

currency

fluctuations,

economic

instability

and

political

developments.

Investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

small

or

midcap

size

and

lesser

liquidity.

Because

the

Fund

may

invest

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Political,

social

or

economic

disruptions

in

the

region,

even

in

countries

in

which

the

Fund

is

not

invested,

may

adversely

affect

the

value

of

securities

held

by

the

Fund.

Value

securities

may

not

increase

in

price

as

anticipated

or

may

decline

further

in

value.

The

manager’s

portfolio

selection

strategy

is

not

solely

based

on

ESG

considerations,

and

therefore

the

issuers

in

which

the

fund

invests

may

not

be

considered

ESG-focused

companies.

Integrating

ESG

considerations

into

the

investment

process

is

not

a

guarantee

that

better

performance

will

be

achieved.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

Gross

expenses

are

the

Fund’s

total

annual

operating

expenses

as

of

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

Net

expenses

reflect

contractual

fee

waivers,

expense

caps

and/or

reimbursements,

which

cannot

be

terminated

prior

to

4/30/23

without

Board

consent.

Additional

amounts

may

be

voluntarily

waived

and/or

reimbursed

and

may

be

modified

or

discontinued

at

any

time

without

notice.

2.

Total

return

was

positively

impacted

by

the

recognition

of

tax

reclaims

for

previously

withheld

taxes

on

dividends

in

certain

countries

across

the

European

Union

(see

Note

1f

in

the

Notes

to

Financial

Statements

section).

Uncertainty

exists

with

respect

to

future

recognition

of

additional

European

Union

tax

reclaims.

Total

return

would

have

been

lower

without

recognition

of

such

tax

reclaims

during

the

year

ended

12/31/20.

3.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

4.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

5.

Source:

FactSet.

The

MSCI

ACWI

ex

USA

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

and

emerging

markets,

excluding

the

U.S.

The

MSCI

EAFE

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

markets

excluding

the

U.S.

and

Canada.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

6.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(1/1/22–12/31/22)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

Primary

$0.1008

$0.5298

$0.6306

Service

$0.0771

$0.5298

$0.6069

Total

Annual

Operating

Expenses

6

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

Primary

0.91%

0.95%

Service

1.06%

1.10%

Your

Fund’s

Expenses

International

Equity

Series

16

ftinstitutional.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

if

applicable,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

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

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

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

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

7/1/22

Ending

Account

Value

12/31/22

Expenses

Paid

During

Period

7/1/22–12/31/22

1,2

Ending

Account

Value

12/31/22

Expenses

Paid

During

Period

7/1/22–12/31/22

1,2

a

Net

Annualized

Expense

Ratio

2

Primary

$1,000

$1,046.85

$3.50

$1,021.78

$3.46

0.68%

Service

$1,000

$1,047.43

$3.90

$1,021.39

$3.85

0.76%

Templeton

Institutional

Funds

Financial

Highlights

Foreign

Smaller

Companies

Series

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

17

a

Year

Ended

December

31,

2022

2021

2020

2019

2018

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$21.80

$23.03

$21.40

$17.96

$25.08

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.31

0.28

0.17

0.30

0.37

Net

realized

and

unrealized

gains

(losses)

...........

(5.38)

2.07

1.74

3.79

(4.97)

Total

from

investment

operations

....................

(5.07)

2.35

1.91

4.09

(4.60)

Less

distributions

from:

Net

investment

income

..........................

(0.32)

(0.28)

(0.22)

(0.37)

(0.21)

Net

realized

gains

.............................

(0.06)

(3.30)

(0.06)

(0.28)

(2.31)

Total

distributions

...............................

(0.38)

(3.58)

(0.28)

(0.65)

(2.52)

Net

asset

value,

end

of

year

.......................

$16.35

$21.80

$23.03

$21.40

$17.96

Total

return

....................................

(23.19

)%

10.72%

8.95%

22.86%

(18.48)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.02%

1.04%

1.04%

1.02%

1.01%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.02%

c

1.04%

c

1.03%

1.02%

c

1.00%

d

Net

investment

income

...........................

1.76%

1.13%

0.87%

1.48%

1.54%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$353,380

$739,717

$725,098

$782,971

$739,576

Portfolio

turnover

rate

............................

16.54%

31.09%

34.89%

39.48%

34.10%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Institutional

Funds

Schedule

of

Investments,

December

31,

2022

Foreign

Smaller

Companies

Series

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

a

Industry

Shares

a

Value

a

Common

Stocks

95.2%

Austria

1.5%

a

AT&S

Austria

Technologie

&

Systemtechnik

AG

..............

Electronic

Equipment,

Instruments

&

Components

55,774

$

1,912,928

a,b

DO

&

CO

AG

...................

Commercial

Services

&

Supplies

36,580

3,467,198

5,380,126

Bahamas

1.3%

b

OneSpaWorld

Holdings

Ltd.

........

Diversified

Consumer

Services

492,132

4,591,592

Belgium

2.9%

Barco

NV

......................

Electronic

Equipment,

Instruments

&

Components

276,551

6,850,904

a,b

Kinepolis

Group

NV

..............

Entertainment

86,235

3,591,997

10,442,901

Brazil

2.7%

Camil

Alimentos

SA

...............

Food

Products

2,043,400

3,207,940

M

Dias

Branco

SA

................

Food

Products

705,800

4,785,496

Tres

Tentos

Agroindustrial

SA

.......

Food

Products

901,600

1,590,914

9,584,350

Canada

3.1%

a,b

Canada

Goose

Holdings,

Inc.

.......

Textiles,

Apparel

&

Luxury

Goods

74,100

1,317,820

Canadian

Western

Bank

...........

Banks

281,898

5,009,207

Computer

Modelling

Group

Ltd.

......

Energy

Equipment

&

Services

755,404

3,252,589

North

West

Co.,

Inc.

(The)

..........

Food

&

Staples

Retailing

55,800

1,465,883

11,045,499

China

1.7%

c

JNBY

Design

Ltd.,

Reg

S

..........

Textiles,

Apparel

&

Luxury

Goods

1,291,000

1,534,048

Xtep

International

Holdings

Ltd.

......

Textiles,

Apparel

&

Luxury

Goods

3,967,123

4,390,561

5,924,609

Denmark

0.5%

Matas

A/S

......................

Specialty

Retail

183,813

1,840,156

Finland

2.9%

Anora

Group

OYJ

................

Beverages

397,346

3,133,678

Fiskars

OYJ

Abp

.................

Household

Durables

130,302

2,148,335

Huhtamaki

OYJ

..................

Containers

&

Packaging

142,035

4,865,463

10,147,476

Germany

7.2%

a

Adesso

SE

.....................

IT

Services

18,606

2,616,308

a,b

flatexDEGIRO

AG

................

Capital

Markets

169,985

1,146,245

Gerresheimer

AG

................

Life

Sciences

Tools

&

Services

80,066

5,355,798

Jenoptik

AG

....................

Electronic

Equipment,

Instruments

&

Components

162,081

4,408,122

b,c

Montana

Aerospace

AG,

144A,

Reg

S

.

Aerospace

&

Defense

202,782

3,146,299

Rational

AG

....................

Machinery

5,919

3,514,699

Stabilus

SE

.....................

Machinery

81,136

5,435,844

25,623,315

Greece

1.2%

JUMBO

SA

.....................

Specialty

Retail

242,739

4,163,008

Hong

Kong

2.9%

Techtronic

Industries

Co.

Ltd.

.......

Machinery

305,500

3,393,184

a

Value

Partners

Group

Ltd.

..........

Capital

Markets

7,464,000

2,741,276

Templeton

Institutional

Funds

Schedule

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

19

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Hong

Kong

(continued)

VTech

Holdings

Ltd.

..............

Communications

Equipment

632,900

$

4,070,194

10,204,654

India

0.5%

Exide

Industries

Ltd.

..............

Auto

Components

790,226

1,718,733

Israel

0.5%

b,d

Nayax

Ltd.

.....................

Electronic

Equipment,

Instruments

&

Components

98,764

1,857,398

Italy

9.3%

Brunello

Cucinelli

SpA

.............

Textiles,

Apparel

&

Luxury

Goods

58,521

4,329,823

c

Carel

Industries

SpA,

144A,

Reg

S

...

Building

Products

75,635

1,902,685

Interpump

Group

SpA

.............

Machinery

140,327

6,335,062

MARR

SpA

.....................

Food

&

Staples

Retailing

196,370

2,397,295

Sanlorenzo

SpA

.................

Leisure

Products

191,479

7,567,900

a,b

Seco

SpA

......................

Technology

Hardware,

Storage

&

Peripherals

688,543

3,938,165

c

Technogym

SpA,

144A,

Reg

S

......

Leisure

Products

824,172

6,320,293

32,791,223

Japan

18.7%

Anicom

Holdings,

Inc.

.............

Insurance

350,700

1,537,569

Asics

Corp.

.....................

Textiles,

Apparel

&

Luxury

Goods

322,200

7,079,819

Bunka

Shutter

Co.

Ltd.

............

Building

Products

278,900

2,335,104

en

Japan,

Inc.

...................

Professional

Services

104,600

1,914,474

Fuji

Oil

Holdings,

Inc.

.............

Food

Products

121,800

1,879,738

Glory

Ltd.

......................

Machinery

105,500

1,751,994

Hosokawa

Micron

Corp.

...........

Machinery

107,900

2,186,071

Idec

Corp.

......................

Electrical

Equipment

153,600

3,387,953

IDOM,

Inc.

.....................

Specialty

Retail

536,700

2,689,019

Meitec

Corp.

....................

Professional

Services

320,600

5,813,707

Morinaga

&

Co.

Ltd.

..............

Food

Products

50,500

1,506,236

Nichiha

Corp.

...................

Building

Products

184,300

3,696,119

Nihon

Parkerizing

Co.

Ltd.

..........

Chemicals

218,600

1,549,166

Nissei

ASB

Machine

Co.

Ltd.

........

Machinery

116,600

3,771,336

Qol

Holdings

Co.

Ltd.

.............

Food

&

Staples

Retailing

329,500

2,910,388

Shima

Seiki

Manufacturing

Ltd.

......

Machinery

290,900

4,062,617

Square

Enix

Holdings

Co.

Ltd.

.......

Entertainment

36,500

1,693,948

TechnoPro

Holdings,

Inc.

..........

Professional

Services

215,900

5,745,993

Topcon

Corp.

...................

Electronic

Equipment,

Instruments

&

Components

255,600

2,944,006

Tsubakimoto

Chain

Co.

............

Machinery

104,300

2,352,081

Tsumura

&

Co.

..................

Pharmaceuticals

234,600

5,143,310

65,950,648

Netherlands

1.0%

c

Flow

Traders,

144A,

Reg

S

.........

Capital

Markets

151,774

3,515,610

Norway

2.4%

a,b

PhotoCure

ASA

..................

Pharmaceuticals

299,461

3,257,827

TGS

ASA

......................

Energy

Equipment

&

Services

376,970

5,096,351

8,354,178

Philippines

1.0%

Century

Pacific

Food,

Inc.

..........

Food

Products

7,878,900

3,650,783

South

Korea

4.2%

b

BNK

Financial

Group,

Inc.

..........

Banks

496,069

2,566,342

b

DGB

Financial

Group,

Inc.

..........

Banks

630,673

3,504,210

Templeton

Institutional

Funds

Schedule

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

South

Korea

(continued)

b

Hite

Jinro

Co.

Ltd.

................

Beverages

147,623

$

3,008,431

d

i-SENS,

Inc.

....................

Health

Care

Equipment

&

Supplies

90,388

2,366,342

b

NongShim

Co.

Ltd.

...............

Food

Products

11,593

3,287,920

14,733,245

Spain

0.5%

Construcciones

y

Auxiliar

de

Ferrocarriles

SA

................

Machinery

64,931

1,841,545

Sweden

3.3%

c

Dometic

Group

AB,

144A

..........

Auto

Components

481,748

3,116,437

Electrolux

Professional

AB,

B

.......

Machinery

507,721

2,131,838

Granges

AB

....................

Metals

&

Mining

479,732

3,928,720

c

Thule

Group

AB,

144A,

Reg

S

.......

Leisure

Products

128,664

2,694,773

11,871,768

Switzerland

4.0%

Bucher

Industries

AG

.............

Machinery

13,915

5,806,819

a

Logitech

International

SA

..........

Technology

Hardware,

Storage

&

Peripherals

35,607

2,216,536

c

Medacta

Group

SA,

144A,

Reg

S

....

Health

Care

Equipment

&

Supplies

18,687

2,086,006

Siegfried

Holding

AG

..............

Life

Sciences

Tools

&

Services

6,169

4,097,543

14,206,904

Taiwan

8.0%

Chicony

Electronics

Co.

Ltd.

........

Technology

Hardware,

Storage

&

Peripherals

1,296,037

3,630,254

Giant

Manufacturing

Co.

Ltd.

........

Leisure

Products

309,482

2,013,792

Johnson

Health

Tech

Co.

Ltd.

.......

Leisure

Products

1,258,000

2,839,775

King

Yuan

Electronics

Co.

Ltd.

......

Semiconductors

&

Semiconductor

Equipment

3,910,000

4,592,555

Merida

Industry

Co.

Ltd.

...........

Leisure

Products

468,000

2,536,701

Nan

Pao

Resins

Chemical

Co.

Ltd.

...

Chemicals

492,000

2,126,247

Nien

Made

Enterprise

Co.

Ltd.

......

Household

Durables

195,000

1,863,599

Primax

Electronics

Ltd.

............

Electronic

Equipment,

Instruments

&

Components

1,177,000

2,121,170

Shin

Zu

Shing

Co.

Ltd.

............

Machinery

690,000

1,828,140

Topkey

Corp.

...................

Leisure

Products

318,000

1,890,261

Tripod

Technology

Corp.

...........

Electronic

Equipment,

Instruments

&

Components

898,000

2,740,377

28,182,871

Thailand

2.0%

Hana

Microelectronics

PCL

.........

Electronic

Equipment,

Instruments

&

Components

2,733,300

4,051,844

Major

Cineplex

Group

PCL

.........

Entertainment

5,493,300

2,886,714

6,938,558

United

Kingdom

10.4%

Coats

Group

plc

.................

Textiles,

Apparel

&

Luxury

Goods

3,334,748

2,675,912

Greggs

plc

.....................

Hotels,

Restaurants

&

Leisure

136,286

3,829,093

c

Ibstock

plc,

144A,

Reg

S

...........

Construction

Materials

1,982,378

3,705,719

Johnson

Service

Group

plc

.........

Commercial

Services

&

Supplies

1,550,663

1,816,484

Man

Group

plc

..................

Capital

Markets

2,022,889

5,204,389

Oxford

Instruments

plc

............

Electronic

Equipment,

Instruments

&

Components

128,173

3,501,833

Pagegroup

plc

..................

Professional

Services

708,547

3,944,945

Rathbones

Group

plc

.............

Capital

Markets

207,651

5,108,446

VIDENDUM

plc

..................

Household

Durables

187,601

2,446,481

Templeton

Institutional

Funds

Schedule

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

21

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

Kingdom

(continued)

b,c

Watches

of

Switzerland

Group

plc,

144A

Specialty

Retail

460,347

$

4,497,616

36,730,918

United

States

1.5%

Axis

Capital

Holdings

Ltd.

..........

Insurance

41,819

2,265,336

a,b

IMAX

Corp.

.....................

Entertainment

197,917

2,901,463

5,166,799

Total

Common

Stocks

(Cost

$294,966,938)

.....................................

336,458,867

Warrants

a

a

a

a

a

Warrants

0.1%

Bahamas

0.1%

b

OneSpaWorld

Holdings

Ltd.

,

3/19/24

..

Diversified

Consumer

Services

202,835

253,544

b

OneSpaWorld

Holdings

Ltd.

,

3/19/24

..

Diversified

Consumer

Services

59,949

74,936

328,480

Total

Warrants

(Cost

$221,371)

................................................

328,480

Total

Long

Term

Investments

(Cost

$295,188,309)

...............................

336,787,347

Short

Term

Investments

4.7%

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

3.4%

United

States

3.4%

e

FHLB,

1/03/23

..................

11,800,000

11,800,000

Total

U.S.

Government

and

Agency

Securities

(Cost

$11,797,443)

.................

11,800,000

Shares

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.3%

Money

Market

Funds

1.3%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

3.782%

.........

4,656,168

4,656,168

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$4,656,168)

.................................................................

4,656,168

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$16,453,611

)

................................

16,456,168

a

a

a

Total

Investments

(Cost

$311,641,920)

100.0%

..................................

$353,243,515

Other

Assets,

less

Liabilities

0.0%

†

............................................

136,595

Net

Assets

100.0%

...........................................................

$353,380,110

a

a

a

See

Abbreviations

on

page

44

.

Templeton

Institutional

Funds

Schedule

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

2022.

See

Note

1(e).

b

Non-income

producing.

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

December

31,

2022,

the

aggregate

value

of

these

securities

was

$32,519,486,

representing

9.2%

of

net

assets.

d

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(c).

e

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

f

See

Note

1(e)

regarding

securities

on

loan.

g

See

Note

3(d)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Templeton

Institutional

Funds

Financial

Highlights

International

Equity

Series

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

23

a

Year

Ended

December

31,

2022

2021

2020

2019

2018

Primary

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.96

$15.22

$15.54

$14.87

$21.99

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.26

0.26

1.03

c

0.64

0.42

Net

realized

and

unrealized

gains

(losses)

...........

(1.40)

0.55

(0.32)

1.06

(3.66)

Total

from

investment

operations

....................

(1.14)

0.81

0.71

1.70

(3.24)

Less

distributions

from:

Net

investment

income

..........................

(0.10)

(1.46)

(0.67)

(1.02)

(0.42)

Net

realized

gains

.............................

(0.53)

(2.61)

(0.36)

(0.01)

(3.46)

Total

distributions

...............................

(0.63)

(4.07)

(1.03)

(1.03)

(3.88)

Net

asset

value,

end

of

year

.......................

$10.19

$11.96

$15.22

$15.54

$14.87

Total

return

....................................

(9.23)%

5.75%

5.30%

11.57%

(14.87)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.87%

0.94%

0.87%

0.82%

0.80%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.83%

0.91%

0.84%

0.82%

d

0.80%

d,e

Net

investment

income

...........................

2.35%

1.64%

7.51%

c

4.13%

1.98%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$196,051

$386,291

$447,139

$1,695,980

$2,785,308

Portfolio

turnover

rate

............................

46.42%

44.73%

89.34%

36.83%

f

25.60%

f

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.77

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.86%

and

total

return

would

have

been

(0.03)%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Templeton

Institutional

Funds

Financial

Highlights

International

Equity

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

Year

Ended

December

31,

2022

2021

2020

2019

2018

Service

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.24

$15.48

$15.79

$14.97

$22.07

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.20

0.24

1.17

c

0.98

0.38

Net

realized

and

unrealized

gains

(losses)

...........

(1.38)

0.58

(0.47)

0.70

(3.66)

Total

from

investment

operations

....................

(1.18)

0.82

0.70

1.68

(3.28)

Less

distributions

from:

Net

investment

income

..........................

(0.08)

(1.45)

(0.65)

(0.85)

(0.36)

Net

realized

gains

.............................

(0.53)

(2.61)

(0.36)

(0.01)

(3.46)

Total

distributions

...............................

(0.61)

(4.06)

(1.01)

(0.86)

(3.82)

Net

asset

value,

end

of

year

.......................

$10.45

$12.24

$15.48

$15.79

$14.97

Total

return

....................................

(9.29)%

5.69%

5.16%

11.34%

(15.01)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.01%

1.04%

1.01%

0.97%

0.95%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.97%

1.00%

0.98%

0.97%

d

0.95%

d,e

Net

investment

income

...........................

1.71%

1.52%

8.42%

c

3.98%

1.83%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$123

$521

$448

$700

$5,375

Portfolio

turnover

rate

............................

46.42%

44.73%

89.34%

36.83%

f

25.60%

f

c

Net

investment

income

per

share

includes

approximately

$0.78

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

2.77%

and

total

return

would

have

been

(0.14)%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

Templeton

Institutional

Funds

Schedule

of

Investments,

December

31,

2022

International

Equity

Series

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

25

a

a

Industry

Shares

a

Value

a

Common

Stocks

95.0%

Belgium

1.7%

Anheuser-Busch

InBev

SA/NV

......

Beverages

54,959

$

3,310,079

Canada

2.1%

a

GFL

Environmental,

Inc.

...........

Commercial

Services

&

Supplies

138,600

4,051,278

Chile

1.9%

Antofagasta

plc

..................

Metals

&

Mining

202,471

3,779,493

China

1.1%

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

14,209

2,245,448

France

14.2%

Cie

de

Saint-Gobain

..............

Building

Products

55,195

2,700,060

Danone

SA

.....................

Food

Products

69,571

3,666,619

Eiffage

SA

......................

Construction

&

Engineering

36,042

3,545,075

Sanofi

SA

......................

Pharmaceuticals

43,928

4,235,629

TotalEnergies

SE

................

Oil,

Gas

&

Consumable

Fuels

147,557

9,262,193

Veolia

Environnement

SA

..........

Multi-Utilities

170,022

4,368,415

27,777,991

Germany

12.7%

Bayer

AG

......................

Pharmaceuticals

53,526

2,754,860

Continental

AG

..................

Auto

Components

41,853

2,494,932

Deutsche

Boerse

AG

..............

Capital

Markets

21,039

3,622,540

Deutsche

Telekom

AG

.............

Diversified

Telecommunication

Services

394,087

7,840,620

Fresenius

Medical

Care

AG

&

Co.

KGaA

Health

Care

Providers

&

Services

50,669

1,654,901

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

97,189

2,953,623

SAP

SE

.......................

Software

35,513

3,666,217

24,987,693

Hungary

1.0%

Richter

Gedeon

Nyrt.

.............

Pharmaceuticals

90,366

2,005,993

Ireland

1.7%

CRH

plc

.......................

Construction

Materials

84,992

3,379,989

Japan

16.5%

Hitachi

Ltd.

.....................

Industrial

Conglomerates

78,200

3,933,384

Honda

Motor

Co.

Ltd.

.............

Automobiles

141,400

3,224,088

Isuzu

Motors

Ltd.

................

Automobiles

314,600

3,645,870

Komatsu

Ltd.

...................

Machinery

137,000

2,960,120

Nitori

Holdings

Co.

Ltd.

............

Specialty

Retail

19,600

2,560,108

Sony

Group

Corp.

................

Household

Durables

45,100

3,436,417

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

87,700

3,080,622

Sumitomo

Mitsui

Financial

Group,

Inc.

.

Banks

189,100

7,605,346

Tokyo

Electron

Ltd.

...............

Semiconductors

&

Semiconductor

Equipment

6,500

1,909,232

32,355,187

Netherlands

7.2%

ING

Groep

NV

..................

Banks

277,352

3,378,312

SBM

Offshore

NV

................

Energy

Equipment

&

Services

122,866

1,932,940

Shell

plc

.......................

Oil,

Gas

&

Consumable

Fuels

312,869

8,819,668

14,130,920

Singapore

2.1%

United

Overseas

Bank

Ltd.

.........

Banks

176,200

4,036,010

South

Korea

4.5%

KB

Financial

Group,

Inc.

...........

Banks

61,217

2,355,248

Templeton

Institutional

Funds

Schedule

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

South

Korea

(continued)

b

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

108,665

$

4,789,716

Shinhan

Financial

Group

Co.

Ltd.

....

Banks

61,640

1,723,242

8,868,206

Spain

2.0%

Red

Electrica

Corp.

SA

............

Electric

Utilities

220,900

3,840,868

Switzerland

1.7%

Adecco

Group

AG

................

Professional

Services

100,720

3,312,991

Taiwan

1.7%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

232,492

3,377,084

Thailand

1.0%

Kasikornbank

PCL

...............

Banks

476,200

2,024,738

United

Kingdom

18.7%

AstraZeneca

plc

.................

Pharmaceuticals

34,406

4,655,606

BAE

Systems

plc

................

Aerospace

&

Defense

394,498

4,074,366

BP

plc

.........................

Oil,

Gas

&

Consumable

Fuels

1,546,054

8,920,272

Compass

Group

plc

..............

Hotels,

Restaurants

&

Leisure

109,581

2,530,343

DS

Smith

plc

....................

Containers

&

Packaging

728,672

2,810,665

Informa

plc

.....................

Media

39,827

297,088

Lloyds

Banking

Group

plc

..........

Banks

9,829,894

5,364,085

Smith

&

Nephew

plc

..............

Health

Care

Equipment

&

Supplies

275,340

3,676,966

Standard

Chartered

plc

............

Banks

246,815

1,840,798

c

WH

Smith

plc

...................

Specialty

Retail

136,321

2,424,431

36,594,620

United

States

3.2%

c

Haleon

plc

.....................

Personal

Products

863,032

3,414,545

c

ICON

plc

.......................

Life

Sciences

Tools

&

Services

15,100

2,933,175

6,347,720

Total

Common

Stocks

(Cost

$156,418,277)

.....................................

186,426,308

a

a

a

a

a

Escrows

and

Litigation

Trusts

0.0%

c,d

Hemisphere

Properties

India

Ltd.,

Escrow

Account

................

2,094,964

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$156,418,277)

...............................

186,426,308

Templeton

Institutional

Funds

Schedule

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

27

Short

Term

Investments

3.9%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

3.9%

United

States

3.9%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

3.782%

.........

7,572,866

$

7,572,866

Total

Money

Market

Funds

(Cost

$7,572,866)

...................................

7,572,866

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$7,572,866

)

.................................

7,572,866

a

a

a

Total

Investments

(Cost

$163,991,143)

98.9%

...................................

$193,999,174

Other

Assets,

less

Liabilities

1.1%

.............................................

2,174,597

Net

Assets

100.0%

...........................................................

$196,173,771

a

a

a

a

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

2022.

See

Note

1(e).

b

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(c).

c

Non-income

producing.

d

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

e

See

Note

3(d)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Templeton

Institutional

Funds

Schedule

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

At

December

31,

2022,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(d). 

See

Note 6 regarding

other

derivative

information.

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Equity

contracts

MSCI

EAFE

Index

............................

Long

20

$

1,949,400

3/17/23

$

(67,701)

Total

Futures

Contracts

......................................................................

$(67,701)

*

As

of

year

end.

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Assets

and

Liabilities

December

31,

2022

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

Foreign

Smaller

Companies

Series

International

Equity

Series

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

..................................................

$306,985,752

$156,418,277

Cost

-

Non-controlled

affiliates

(Note

3

d

)

.......................................

4,656,168

7,572,866

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$14,295,734

and

$3,501,754

respectively)

............................................................

$348,587,347

$186,426,308

Value

-

Non-controlled

affiliates

(Note

3

d

)

......................................

4,656,168

7,572,866

Cash

...................................................................

3,319,784

—

Foreign

currency,

at

value

(cost

$41,

233

and

$206,501

respectively)

...................

41,233

206,501

Receivables:

Investment

securities

sold

..................................................

—

779,519

Capital

shares

sold

.......................................................

257,976

72,657

Dividends

..............................................................

1,325,609

3,588,770

European

Union

tax

reclaims

(Note

1

f

)

........................................

386,518

845,924

Deposits

with

brokers

for:

Futures

contracts

.......................................................

—

103,410

Total

assets

.........................................................

358,574,635

199,595,955

Liabilities:

Payables:

Investment

securities

purchased

.............................................

54,521

208,049

Capital

shares

redeemed

..................................................

103,953

545,430

Management

fees

........................................................

288,768

118,039

Transfer

agent

fees

.......................................................

2,322

5,192

Trustees'

fees

and

expenses

................................................

1,476

1,991

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

f

)

............

—

2,282,030

Variation

margin

on

futures

contracts

..........................................

—

18,756

Payable

upon

return

of

securities

loaned

(Note

1

e

)

.................................

4,656,168

—

Accrued

expenses

and

other

liabilities

..........................................

87,317

242,697

Total

liabilities

........................................................

5,194,525

3,422,184

Net

assets,

at

value

................................................

$353,380,110

$196,173,771

Net

assets

consist

of:

Paid-in

capital

............................................................

$349,214,128

$168,064,240

Total

distributable

earnings

(losses)

............................................

4,165,982

28,109,531

Net

assets,

at

value

................................................

$353,380,110

$196,173,771

Shares

outstanding

........................................................

21,616,684

Net

asset

value

per

share

...................................................

$16.35

International

Equity

Series

Primary

Shares:

Net

assets,

at

value

.......................................................................

$196,051,063

Shares

outstanding

........................................................................

19,243,984

Net

asset

value

per

share

...................................................................

$10.19

Service

Shares:

Net

assets,

at

value

.......................................................................

$122,708

Shares

outstanding

........................................................................

11,745

Net

asset

value

per

share

...................................................................

$10.45

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Operations

for

the

year

ended

December

31,

2022

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

Foreign

Smaller

Companies

Series

International

Equity

Series

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,910,314

and

$594,974,

respectively)

Unaffiliated

issuers

.......................................................

$13,739,418

$8,074,871

Non-controlled

affiliates

(Note

3

d

)

............................................

—

75,316

Interest:

Unaffiliated

issuers

.......................................................

162,375

1,199

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

....................................

117,370

23,686

Non-controlled

affiliates

(Note

3

d

)

............................................

48,149

11,486

Other

income

(Note

1

f

)

......................................................

389,130

309,527

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

f

)

.........

—

(82,494)

Total

investment

income

..................................................

14,456,442

8,413,591

Expenses:

Management

fees

(Note

3

a

)

..................................................

4,929,967

2,052,371

Transfer

agent

fees:

(Note

3c

)

    Primary

Shares

.........................................................

—

77,131

    Service

Shares

.........................................................

—

40

Transfer

agent

fees

(Note

3

c

)

.................................................

129,889

—

Sub-transfer

agent

fees:

(Note

3c

)

    Service

Shares

.........................................................

—

286

Custodian

fees

...........................................................

53,176

64

Registration

and

filing

fees

...................................................

35,807

36,106

Professional

fees

..........................................................

72,329

150,712

Trustees'

fees

and

expenses

.................................................

28,136

—

Other

...................................................................

58,794

414

Total

expenses

........................................................

5,308,098

2,317,124

Expenses

waived/paid

by

affiliates

(Note

3

d

and

3

e

)

.............................

(5,975)

(117,452)

Net

expenses

........................................................

5,302,123

2,199,672

Net

investment

income

...............................................

9,154,319

6,213,919

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

.....................................................

(30,126,240)

13,144,629

Foreign

currency

transactions

...............................................

(263,531)

(350,852)

Futures

contracts

........................................................

—

(421,550)

Net

realized

gain

(loss)

.................................................

(30,389,771)

12,372,227

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

.....................................................

(156,509,727)

(49,690,036)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

.............

6,139

(128,326)

Futures

contracts

........................................................

—

(105,570)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(156,503,588)

(49,923,932)

Net

realized

and

unrealized

gain

(loss)

...........................................

(186,893,359)

(37,551,705)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.........................

$(177,739,040)

$(31,337,786)

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

Foreign

Smaller

Companies

Series

International

Equity

Series

Year

Ended

December

31,

2022

Year

Ended

December

31,

2021

Year

Ended

December

31,

2022

Year

Ended

December

31,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$9,154,319

$8,456,771

$6,213,919

$7,395,973

Net

realized

gain

(loss)

............

(30,389,771)

105,168,552

12,372,227

38,871,211

Net

change

in

unrealized

appreciation

(depreciation)

.................

(156,503,588)

(37,526,164)

(49,923,932)

(19,828,202)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

(177,739,040)

76,099,159

(31,337,786)

26,438,982

Distributions

to

shareholders:

Primary

Shares

..................

—

—

(12,095

,509)

(110,460,144)

Service

Shares

..................

—

—

(7,083)

(166,811)

Distributions

to

shareholders

.........

(8,550,231)

(105,430,343)

—

—

Total

distributions

to

shareholders

.....

(8,550,231)

(105,430,343)

(12,102,592)

(110,626,955)

Capital

share

transactions:

(Note

2

)

Primary

Shares

..................

—

—

(146,821,378)

23,198,093

Service

Shares

..................

—

—

(376,524)

215,336

Capital

share

transactions

(Note

2

)

.....

(200,048,009)

43,950,886

—

—

Total

capital

share

transactions

.......

(200,048,009)

43,950,886

(147,197,902)

23,413,429

Net

increase

(decrease)

in

net

assets

.....................

(386,337,280)

14,619,702

(190,638,280)

(60,774,544)

Net

assets:

Beginning

of

year

..................

739,717,390

725,097,688

386,812,051

447,586,595

End

of

year

......................

$353,380,110

$739,717,390

$196,173,771

$386,812,051

Templeton

Institutional

Funds

Notes

to

Financial

Statements

32

ftinstitutional.com

Annual

Report

1.

Organization

and

Significant

Accounting

Policies

Templeton

Institutional

Funds (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

two

separate

funds

(Funds).

The

Funds

follow

the

accounting

and

reporting

guidance

in

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standard

Codification

Topic

946,

Financial

Services

–

Investment

Companies

(ASC

946)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP),

including,

but

not

limited

to,

ASC

946.

International

Equity

Series

offers

Primary

Shares

and

Service

Shares.

Each

class

of

shares

may

differ

by

its initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s

Board

of

Trustees

(the

Board),

the

Board

has

designated

the

Funds’

investment

manager

as

the

valuation

designee

and

has

responsibility

for

oversight

of

valuation.

The

investment

manager

is

assisted

by

the

Funds'

administrator

in

performing

this

responsibility,

including

leading

the

cross-

functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

listed

on

an

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.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

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.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the

OTC

market

rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value. 

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Funds'

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

Templeton

Institutional

Funds

Notes

to

Financial

Statements

33

ftinstitutional.com

Annual

Report

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Funds.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Funds'

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

December

31,

2022,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

for

financial

reporting

purposes. 

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.

The

Funds

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

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.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

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

Board.

The

Funds

do

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statements

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.

Securities

Purchased

on

a

Delayed

Delivery

Basis

Certain

or

all

Funds

purchase

securities

on

a

delayed

delivery

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

d.

Derivative

Financial

Instruments

Certain

or

all

Funds

invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Funds

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

34

ftinstitutional.com

Annual

Report

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

Certain

or

all

Funds

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

equity

price

risk.

A

futures

contract

is

an

agreement

between

the

Funds

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Funds,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statements

of

Assets

and

Liabilities.

At

December

31,

2022,

Foreign

Smaller

Companies

Series

had

no

futures

contracts.

See

Note

6

regarding

other

derivative

information.

e.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Funds

receive

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds.

Additionally,

the

Foreign

Smaller

Companies

Series

and

International

Equity

Series

held

$10,544,683

and

$3,653,507,

respectively

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities held

as

collateral.

As

such,

the

non-

cash

collateral

is

excluded

from

the

Statements

of

Assets

and

Liabilities. The

Funds

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-

party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Funds

bear

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Funds.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Funds

have

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Funds

in

the

event

of

default

by

a

third

party

borrower.

f.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and

excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Funds

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

certain

or

all

Funds

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statements of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statements

of

Assets

and

Liabilities.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Funds,

if

any,

reduce

the

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their income

tax

returns.

In

the

event

that

EU

reclaims

received

by

the

Funds during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Funds,

and

the Funds

previously

passed through

to

its

shareholders

foreign

taxes

incurred

by

the

Funds

to

be

used

as

a

credit

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Derivative

Financial

Instruments

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

35

ftinstitutional.com

Annual

Report

or

deduction

on

a

shareholder’s

income

tax

return,

the

Funds will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Funds'

shareholders.

During

the

fiscal

year

ended

December

31,

2022,

certain

or

all

Funds

received

EU

reclaims

in

excess

of

the

foreign

taxes

paid

during

the

year.

International

Equity

Series

determined

to

enter

into

a

closing

agreement

with

the

IRS

and

recorded

the

estimated

payments

as

a

reduction

to

income,

as

reflected

in

the

Statements

of

Operations.

Each

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

December

31,

2022, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Funds

invest. 

g.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Funds.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

h.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

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.

i.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Income

and

Deferred

Taxes

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

36

ftinstitutional.com

Annual

Report

2.

Shares

of

Beneficial

Interest

At

December

31,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds’

shares

were

as

follows:

Foreign

Smaller

Companies

Series

Shares

Amount

Advisor

Class

Year

ended

December

31,

2022

Shares

sold

...................................

4,197,769

$75,350,548

Shares

issued

in

reinvestment

of

distributions

..........

520,814

8,259,148

Shares

redeemed

...............................

(17,038,173)

(283,657,705)

Net

increase

(decrease)

..........................

(12,319,590)

$(200,048,009)

Year

ended

December

31,

2021

Shares

sold

...................................

4,047,399

$101,195,141

Shares

issued

in

reinvestment

of

distributions

..........

4,379,342

92,550,331

Shares

redeemed

...............................

(5,981,276)

(149,794,586)

Net

increase

(decrease)

..........................

2,445,465

$43,950,886

International

Equity

Series

Shares

Amount

Primary

Shares

Primary

Shares:

Year

ended

December

31,

2022

Shares

sold

...................................

5,546,145

$61,560,957

Shares

issued

in

reinvestment

of

distributions

..........

1,197,455

11,551,000

Shares

redeemed

...............................

(19,788,709)

(219,933,335)

Net

increase

(decrease)

..........................

(13,045,109)

$(146,821,378)

Year

ended

December

31,

2021

Shares

sold

...................................

4,888,882

$77,425,011

Shares

issued

in

reinvestment

of

distributions

..........

7,487,110

94,340,837

Shares

redeemed

...............................

(9,461,057)

(148,567,755)

Net

increase

(decrease)

..........................

2,914,935

$23,198,093

Service

Shares

Service

Shares:

Year

ended

December

31,

2022

Shares

sold

...................................

2,911

$37,138

Shares

issued

in

reinvestment

of

distributions

..........

716

7,083

Shares

redeemed

...............................

(34,473)

(420,745)

Net

increase

(decrease)

..........................

(30,846)

$(376,524)

Year

ended

December

31,

2021

Shares

sold

...................................

19,254

$316,394

Shares

issued

in

reinvestment

of

distributions

..........

12,776

166,811

Shares

redeemed

...............................

(18,345)

(267,869)

Net

increase

(decrease)

..........................

13,685

$215,336

Templeton

Institutional

Funds

Notes

to

Financial

Statements

37

ftinstitutional.com

Annual

Report

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

Foreign

Smaller

Companies

Series

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

International

Equity

Series

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

year

ended

December

31,

2022,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

Under

a

subadvisory

agreement,

FTIC,

an

affiliate

of

TIC,

provides

subadvisory

services

to

Foreign

Smaller

Companies

Series.

The

subadvisory

fee

is

paid

by

TIC

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

Subsidiary

Affiliation

Templeton

Investment

Counsel,

LLC

(TIC)

Investment

manager

Franklin

Templeton

Investments

Corp.

(FTIC)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.950%

Up

to

and

including

$1

billion

0.930%

Over

$1

billion,

up

to

and

including

$5

billion

0.910%

Over

$5

billion,

up

to

and

including

$10

billion

0.890%

Over

$10

billion,

up

to

and

including

$15

billion

0.870%

Over

$15

billion,

up

to

and

including

$20

billion

0.850%

In

excess

of

$20

billion

Annualized

Fee

Rate

Net

Assets

0.775%

Up

to

and

including

$1

billion

0.755%

Over

$1

billion,

up

to

and

including

$5

billion

0.735%

Over

$5

billion,

up

to

and

including

$10

billion

0.715%

Over

$10

billion,

up

to

and

including

$15

billion

0.695%

Over

$15

billion,

up

to

and

including

$20

billion

0.675%

In

excess

of

$20

billion

Foreign

Smaller

Companies

Series

International

Equity

Series

Gross

effective

investment

management

fee

rate

........

0.950%

0.775%

Templeton

Institutional

Funds

Notes

to

Financial

Statements

38

ftinstitutional.com

Annual

Report

b.

Administrative

Fees

Under

an

agreement

with

TIC,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

TIC

based

on

each

of

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

Effective

October

1,

2022,

the

fees

are

based

on

an

annualized

asset

based

fee

of

0.016%

plus

a

reduced

transaction

based

fee.

Prior

to

October

1,

2022,

the

fees

were

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

For

the

year

ended

December

31,

2022,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

International

Equity

Series’

Service

shares

may

pay

up

to

0.15%

of

average

daily

net

assets

for

sub-transfer

agency

fees

as

noted

in

the

Statements

of

Operations.

d.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

year

ended

December

31,

2022,

investments

in

affiliated

management

investment

companies

were

as

follows:

Foreign

Smaller

Companies

Series

International

Equity

Series

Transfer

agent

fees

........................

$128,938

$75,064

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Foreign

Smaller

Companies

Series

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

3.782%

$9,593,212

$87,767,777

$(92,704,821)

$—

$—

$4,656,168

4,656,168

$48,149

Total

Affiliated

Securities

...

$9,593,212

$87,767,777

$(92,704,821)

$—

$—

$4,656,168

$48,149

3.

Transactions

with

Affiliates

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

39

ftinstitutional.com

Annual

Report

e.

Waiver

and

Expense

Reimbursements

TIC

has

contractually

agreed

in

advance

to

limit

the

investment

management

fees

for

International

Equity

Series

to

0.74%

of

the

average

daily

net

assets

of

the

Fund

until

April

30,

2023.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2022,

the

capital

loss

carryforwards

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2022

and

2021,

was

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

International

Equity

Series

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

3.782%

$

5,153,549

$

133,094,966

$

(130,675,649)

$

—

$

—

$

7,572,866

7,572,866

$

75,316

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

3.782%

$—

$15,234,595

$(15,234,595)

$—

$—

$—

—

$11,486

Total

Affiliated

Securities

...

$5,153,549

$148,329,561

$(145,910,244)

$—

$—

$7,572,866

$86,802

Foreign

Smaller

Companies

Series

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

13,376,151

Long

term

.............................

17,803,676

Total

capital

loss

carryforwards

............

$31,179,827

Foreign

Smaller

Companies

Series

International

Equity

Series

2022

2021

2022

2021

Distributions

paid

from:

Ordinary

income

........................

$8,550,231

$12,309,269

$2,738,576

$45,728,296

Long

term

capital

gain

....................

—

93,121,074

9,364,016

64,898,659

$8,550,231

$105,430,343

$12,102,592

$110,626,955

3.

Transactions

with

Affiliates

(continued)

d.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

40

ftinstitutional.com

Annual

Report

At

December

31,

2022,

the

cost

of

investments,

net

unrealiz

ed

appreciation

(depreciation)

and

undistributed

ord

inary

income

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

EU

reclaims,

passive

foreign

investment

company

shares,

foreign

currency

transactions

and

wash

sales.

The

Funds

utilized

a

tax

accounting

practice

to

treat

a

portion

of

the

proceeds

from

capital

shares

redeemed

as

a

distribution

from

net

investment

income

and

realized

capital

gains.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2022,

were

as

follows:

At

December

31,

2022,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

Foreign

Smaller

Companies

Series

International

Equity

Series

a

a

a

Cost

of

investments

.......................

$319,129,236

$169,635,590

Unrealized

appreciation

.....................

$80,929,693

$39,824,408

Unrealized

depreciation

.....................

(46,815,414)

(15,528,525)

Net

unrealized

appreciation

(depreciation)

.......

$34,114,279

$24,295,883

Distributable

earnings:

Undistributed

ordinary

income

................

$1,246,360

$3,247,175

Total

distributable

earnings

..................

$1,246,360

$3,247,175

Foreign

Smaller

Companies

Series

International

Equity

Series

Purchases

..............................

$82,838,073

$118,795,123

Sales

..................................

$270,713,812

$273,690,907

Foreign

Smaller

Companies

Series

International

Equity

Series

Securities

lending

transactions

a

:

Equity

investments

b

........................

$4,656,168

$—

a

The

agreements

can

be

terminated

at

any

time.

b

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statements

of

Assets

and

Liabilities.

4.

Income

Taxes

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

41

ftinstitutional.com

Annual

Report

6.

Other

Derivative

Information

At

December

31,

2022,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

For

the

year

ended

December

31,

2022,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2022,

the

average

month

end

notional

amount

of

futures

contracts

was

$1,990,492.

See

Note

1(d) regarding

derivative

financial

instruments. 

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Funds

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

International

Equity

Series

Equity

contracts

...........

Variation

margin

on

futures

contracts

$

—

Variation

margin

on

futures

contracts

$

67,70

1

a

Total

....................

$—

$67,70

1

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Schedule

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

International

Equity

Series

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

..............

Futures

contracts

$(421,550)

Futures

contracts

$(105,570)

Total

.......................

$(421,550)

$(105,570)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

42

ftinstitutional.com

Annual

Report

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

10.

Credit

Facility

The

Funds,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matured

on

February

3,

2023.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Effective

February

3,

2023,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

2,

2024,

for

a

total

of

$2.675

billion.

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

year ended

fiscal

year,

the

Funds

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

December

31,

2022,

in

valuing

the

Funds'

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Foreign

Smaller

Companies

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Austria

...............................

$

—

$

5,380,126

$

—

$

5,380,126

Bahamas

.............................

4,591,592

—

—

4,591,592

Belgium

..............................

—

10,442,901

—

10,442,901

Brazil

................................

—

9,584,350

—

9,584,350

Canada

..............................

11,045,499

—

—

11,045,499

China

...............................

—

5,924,609

—

5,924,609

Templeton

Institutional

Funds

Notes

to

Financial

Statements

43

ftinstitutional.com

Annual

Report

Level

1

Level

2

Level

3

Total

Foreign

Smaller

Companies

Series

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Denmark

.............................

$

—

$

1,840,156

$

—

$

1,840,156

Finland

..............................

—

10,147,476

—

10,147,476

Germany

.............................

—

25,623,315

—

25,623,315

Greece

..............................

—

4,163,008

—

4,163,008

Hong

Kong

...........................

—

10,204,654

—

10,204,654

India

................................

—

1,718,733

—

1,718,733

Israel

................................

—

1,857,398

—

1,857,398

Italy

.................................

—

32,791,223

—

32,791,223

Japan

...............................

—

65,950,648

—

65,950,648

Netherlands

...........................

3,515,610

—

—

3,515,610

Norway

..............................

—

8,354,178

—

8,354,178

Philippines

............................

3,650,783

—

—

3,650,783

South

Korea

..........................

—

14,733,245

—

14,733,245

Spain

................................

—

1,841,545

—

1,841,545

Sweden

..............................

—

11,871,768

—

11,871,768

Switzerland

...........................

2,216,536

11,990,368

—

14,206,904

Taiwan

...............................

—

28,182,871

—

28,182,871

Thailand

.............................

—

6,938,558

—

6,938,558

United

Kingdom

........................

10,426,763

26,304,155

—

36,730,918

United

States

..........................

5,166,799

—

—

5,166,799

Warrants

..............................

328,480

—

—

328,480

Short

Term

Investments

...................

4,656,168

11,800,000

—

16,456,168

Total

Investments

in

Securities

...........

$45,598,230

$307,645,285

a

$—

$353,243,515

International

Equity

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Belgium

..............................

—

3,310,079

—

3,310,079

Canada

..............................

4,051,278

—

—

4,051,278

Chile

................................

—

3,779,493

—

3,779,493

China

...............................

2,245,448

—

—

2,245,448

France

...............................

—

27,777,991

—

27,777,991

Germany

.............................

—

24,987,693

—

24,987,693

Hungary

.............................

—

2,005,993

—

2,005,993

Ireland

...............................

—

3,379,989

—

3,379,989

Japan

...............................

—

32,355,187

—

32,355,187

Netherlands

...........................

—

14,130,920

—

14,130,920

Singapore

............................

—

4,036,010

—

4,036,010

South

Korea

..........................

—

8,868,206

—

8,868,206

Spain

................................

—

3,840,868

—

3,840,868

Switzerland

...........................

—

3,312,991

—

3,312,991

Taiwan

...............................

—

3,377,084

—

3,377,084

Thailand

.............................

—

2,024,738

—

2,024,738

United

Kingdom

........................

—

36,594,620

—

36,594,620

United

States

..........................

2,933,175

3,414,545

—

6,347,720

Escrows

and

Litigation

Trusts

...............

—

—

—

b

—

Short

Term

Investments

...................

7,572,866

—

—

7,572,866

Total

Investments

in

Securities

...........

$16,802,767

$177,196,407

c

$—

$193,999,174

Liabilities:

Other

Financial

Instruments:

Futures

contracts

........................

$

67,70

1

$

—

$

—

$

67,70

1

Total

Other

Financial

Instruments

.........

$67,701

$—

$—

$67,701

11.

Fair

Value

Measurements

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

44

ftinstitutional.com

Annual

Report

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the year.

12.

New

Accounting

Pronouncements

In June

2022,

the FASB

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

has

reviewed

the

requirements

and

believes

that

the

adoption

of

the

ASU

will

not

have

a

material

impact

on

the

financial

statements.

13.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

a

Includes

foreign

securities

valued

at

$295,845,285,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

b

Includes

financial

instruments

determined

to

have

no

value

at

December

31,

2022.

c

Includes

foreign

securities

valued

at

$177,196,407,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Selected

Portfolio

FHLB

Federal

Home

Loan

Banks

11.

Fair

Value

Measurements

(continued)

TEMPLETON

INSTITUTIONAL

FUNDS

Report

of

Independent

Registered

Public

Accounting

Firm

45

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Templeton

Institutional

Funds

and

Shareholders

of

Foreign

Smaller

Companies

Series

and

International

Equity

Series

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

schedules

of

investments,

of

Foreign

Smaller

Companies

Series

and

International

Equity

Series

(constituting

Templeton

Institutional

Funds,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

December

31,

2022,

the

related

statements

of

operations

for

the

year

ended

December

31,

2022,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2022,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2022

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

December

31,

2022,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2022

and

each

of

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2022

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2022

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2023

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

TEMPLETON

INSTITUTIONAL

FUNDS

Tax

Information

(unaudited)

46

franklintempleton.com

Annual

Report

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Funds

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Funds

hereby

report

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2022:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

source

income

earned

by

the

Fund

during

the

fiscal

year

ended

December

31,

2022:

Pursuant

to:

Foreign

Smaller

Companies

Series

International

Equity

Series

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

—

$13,806,288

Qualified

Dividend

Income

Earned

(QDI)

§854(b)(1)(B)

$8,730,117

$7,951,896

Short-Term

Capital

Gain

Dividends

Distributed

§871(k)(2)(C)

$

1,559,181

—

Interest

Earned

from

Federal

Obligations

Note

(1)

$

159,818

—

Foreign

Smaller

Companies

Series

Foreign

Taxes

Paid

$1,520,547

Foreign

Source

Income

Earned

$11,211,859

Templeton

Institutional

Funds

Board

Members

and

Officers

47

ftinstitutional.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton/Legg

Mason

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1992

119

Bar-S

Foods

(meat

packing

company)

(1981-2010).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Ann

Torre

Bates

(1958)

Trustee

Since

2008

30

Ares

Strategic

Income

Fund

(closed-end

investment

management

company)

(September

2022-present);

Ares

Capital

Corporation

(specialty

finance

company)

(2010-present),

United

Natural

Foods,

Inc.

(food

distribution)

(2013-present),

formerly

,

Navient

Corporation

(loan

management,

servicing

and

asset

recovery)

(2014-2016).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Executive

Vice

President

and

Chief

Financial

Officer,

NHP

Incorporated

(manager

of

multifamily

housing)

(1995-1997);

and

Vice

President

and

Treasurer,

US

Airways,

Inc.

(until

1995).

Terrence

J.

Checki

(1945)

Trustee

Since

January

2023

119

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018-present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2016

120

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-2020).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987-2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Templeton

Institutional

Funds

48

ftinstitutional.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1996

and

Lead

Independent

Trustee

since

2007

120

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

Canadian

National

Railway

(railroad)

(2001-2021),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-

2021),

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

120

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Counselor

and

Special

Advisor

to

the

CEO

and

Board

of

Directors

of

the

Coca-Cola

Company

(beverage

company)

(2021-present);

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(2019-2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

David

W.

Niemiec

(1949)

Trustee

Since

2005

30

Hess

Midstream

LP

(oil

and

gas

midstream

infrastructure)

(2017-present).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Advisor,

Saratoga

Partners

(private

equity

fund);

and

formerly

,

Managing

Director,

Saratoga

Partners

(1998-2001)

and

SBC

Warburg

Dillon

Read

(investment

banking)

(1997-1998);

Vice

Chairman,

Dillon,

Read

&

Co.

Inc.

(investment

banking)

(1991-1997);

and

Chief

Financial

Officer,

Dillon,

Read

&

Co.

Inc.

(1982-1997).

Larry

D.

Thompson

(1945)

Trustee

Since

2005

120

Graham

Holdings

Company

(education

and

media

organization)

(2011-2021);

The

Southern

Company

(energy

company)

(2014-2020;

previously

2010-

2012)

and

Cbeyond,

Inc.

(business

communications

provider)

(2010-

2012).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017-2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Templeton

Institutional

Funds

49

ftinstitutional.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Constantine

D.

Tseretopoulos

(1954)

Trustee

Since

1990

20

None

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Physician,

Chief

of

Staff,

owner

and

operator

of

the

Lyford

Cay

Hospital

(1987-present);

director

of

various

nonprofit

organizations;

and

formerly

,

Cardiology

Fellow,

University

of

Maryland

(1985-1987);

and

Internal

Medicine

Resident,

Greater

Baltimore

Medical

Center

(1982-

1985).

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

and

Vice

President

since

January

2023

and

Trustee

since

2007

131

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015)

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Trustee

Since

2013

120

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Alan

T.

Bartlett

(1970)

President

and

Chief

Executive

Officer

-

Investment

Management

Since

2019

Not

Applicable

Not

Applicable

Lyford

Cay

Nassau,

Bahamas

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Templeton

Global

Advisors

Limited;

Chief

Investment

Officer

of

Templeton

Global

Equity

Group;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

Chairman

of

the

Board,

Goodhart

Partners;

and

formerly

,

Chief

Executive

Officer,

Goodhart

Partners

(2009-2019).

Independent

Board

Members

(continued)

Templeton

Institutional

Funds

50

ftinstitutional.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Steven

J.

Gray

(1955)

Vice

President

Since

2009

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Distributors,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

-

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Susan

Kerr

(1949)

Vice

President

-

AML

Compliance

Since

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Compliance

Analyst,

Franklin

Templeton;

Chief

Anti-Money

Laundering

Compliance

Officer,

Legg

Mason

&

Co.,

or

its

affiliates;

Anti

Money

Laundering

Compliance

Officer;

Senior

Compliance

Officer,

LMIS;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Christopher

Kings

(1974)

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

January

2022

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Templeton

Institutional

Funds

51

ftinstitutional.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton/Legg

Mason

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

Note

3:

Effective

December

31,

2022,

Robert

E.

Wade

ceased

to

be

a

trustee

of

the

Trust.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

U.S.

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

each

of

Ann

Torre

Bates

and

David

W.

Niemiec

as

an

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Bates

and

Mr.

Niemiec

qualify

as

such

an

expert

in

view

of

their

extensive

business

background

and

experience.

Ms.

Bates

has

served

as

a

member

of

the

Fund

Audit

Committee

since

2008.

She

currently

serves

as

a

director

of

Ares

Capital

Corporation

(2010-present)

and

United

Natural

Foods,

Inc.

(2013-present)

and

was

formerly

a

director

of

Navient

Corporation

from

2014

to

2016,

SLM

Corporation

from

1997

to

2014

and

Allied

Capital

Corporation

from

2003

to

2010,

Executive

Vice

President

and

Chief

Financial

Officer

of

NHP

Incorporated

from

1995

to

1997

and

Vice

President

and

Treasurer

of

US

Airways,

Inc.

until

1995.

Mr.

Niemiec

has

served

as

a

member

of

the

Fund

Audit

Committee

since

2005,

currently

serves

as

an

Advisor

to

Saratoga

Partners

and

was

formerly

its

Managing

Director

from

1998

to

2001

and

serves

as

a

director

of

Hess

Midstream

LP

(2017-present).

Mr.

Niemiec

was

formerly

a

director

of

Emeritus

Corporation

from

1999

to

2010

and

OSI

Pharmaceuticals,

Inc.

from

2006

to

2010,

Managing

Director

of

SBC

Warburg

Dillon

Read

from

1997

to

1998,

and

was

Vice

Chairman

from

1991

to

1997

and

Chief

Financial

Officer

from

1982

to

1997

of

Dillon,

Read

&

Co.

Inc.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Bates

and

Mr.

Niemiec

have

each

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Bates

and

Mr.

Niemiec

are

independent

Board

members

as

that

term

is

defined

under

the

applicable

U.S.

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Lori

A.

Weber

(1964)

Vice

President

and

Secretary

Vice

President

since

2011

and

Secretary

since

2013

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Templeton

Institutional

Funds

Shareholder

Information

52

ftinstitutional.com

Annual

Report

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

December

31.

Quarterly

Schedule

of

Investments

The

Trust

files

a

complete

schedule

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

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

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

each

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

ZTIF

A

02/23

©

2023

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Annual

Report

Templeton

Institutional

Funds

Investment

Manager

Distributor

Shareholder

Services

Templeton

Investment

Counsel,

LLC

Franklin

Distributors,

LLC

(800)

321-8563

ftinstitutional.com

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. 

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert. 

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

(2)

The audit committee financial experts are Ann

Torre Bates and David W. Niemiec

and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services.

(a)      Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $90,013 for the fiscal year ended December 31, 2022 and $89,473 for the fiscal year ended December 31, 2021.

(b)      Audit-Related Fees

The aggregate fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4 were $3,000 for the fiscal year ended December 31, 2022 and $3,133 for the fiscal year ended December 31, 2021. The services for which these fees were paid included attestation services.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  

(c)      Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $70,000 for the fiscal year ended December 31, 2022 and $0 for the fiscal year ended December 31, 2021. The services for which these fees were paid included global access to tax platform International Tax View.

(d)      All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended December 31, 2022 and $485 for the fiscal year ended December 31, 2021. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process. 

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $190,211 for the fiscal year ended December 31, 2022 and $35,743 for the fiscal year ended December 31, 2021. The services for which these fees were paid included benchmarking services in connection with the ICI TA Survey,
fees in connection with a license for accounting and business knowledge platform Viewpoint, fees in connection with a license for employee development tool ProEdge and professional fees in connection with SOC 1 Reports.  

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

      (i)   pre-approval of all audit and audit related services;

      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;

      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $263,211 for the fiscal year ended December 31, 2022 and $39,361 for the fiscal year ended December 31, 2021.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

(i) N/A

(j) N/A

Item 5. Audit Committee

of Listed Registrants.

 N/A

Item 6. Schedule of Investments.   N/A

Item 7

. Disclosure of Proxy Voting Policies and Procedures for

Closed-End Management Investment Companies.  N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A

Item 9

. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.  N/A

Item 10

. Submission of Matters to a Vote of Security Holders.

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

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, 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-CSRS, 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 changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12.

Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                       N/A

Item 13. Exhibits.

(a)(1) Code of Ethics

codeofethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.

(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

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 INSTITUTIONAL FUNDS

By S\MATTHEW T. HINKLE______________________

Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  February 27, 2023

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\MATTHEW T. HINKLE______________________

Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  February 27, 2023

By S\CHRISTOPHER KINGS______________________

      Christopher Kings

      Chief Financial Officer, Chief Accounting Officer and Treasurer

Date  February 27, 2023