TEMPLETON GLOBAL BOND FUND

                SUPPLEMENT TO THE CLASS I AND CLASS II PROSPECTUS
                        Prospectus dated January 1, 1997


I. As of January  1, 1997 the Fund  offers a third  class of shares,  designated
"Advisor  Class"  shares.  This  prospectus  describes  the Class I and Class II
shares of the Fund.  Class I, Class II and  Advisor  Class  shares  differ as to
sales  charges,  expenses and services.  Different fees and expenses will affect
performance.  Advisor  Class  shares  are  described  in a  separate  prospectus
relating  only to that class.  For more  information  concerning  Advisor  Class
shares,  contact your  investment  representative  or  Distributors.  Additional
classes and series of shares may be offered in the future.

II.      The table under "Financial Highlights" for Class II Shares is amended 
by replacing it with the following
information:




CLASS II SHARES
YEAR ENDED AUGUST 31                                                1996         19951
- --------------------------------------------------------------- ------------- -------------
                                                                          
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year                              $       9.31  $       9.05
                                                                ------------  ------------
Income from investment operations:
   Net investment income                                                 .61           .21
   Net realized and unrealized gain
                                                                         .41           .24
                                                                         ---           ---
Total from investment operations                                        1.02
                                                                                       .45
Distributions:
   Dividends from net investment income                                (.54)         (.15)
   Tax basis return of capital                                         (.02)
                                                                ------------
                                                                                     (.04)
Total distributions                                                    (.56)
                                                                                     (.19)
Change in net asset value
                                                                         .46           .26
                                                                         ---           ---
Net asset value, end of period                                   $      9.77   $      9.31
                                                                 ===========   ===========
TOTAL RETURN*                                                         11.20%         5.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)                                       $6,563        $2,043
Ratio of expenses to average net assets                                 1.56%        1.57%**
Ratio of net investment income to average net assets                    6.69%        7.47%**
Portfolio turnover rate                                               109.40%      101.12%



1For the period May 1, 1995 (commencement of sales) through August 31, 1995.
*Total  return does not reflect sales  commissions  or the  contingent  deferred
sales charge. Not annualized for periods of less than one year.
**Annualized.







III...The  discussion under "WHO MANAGES THE FUND? - PORTFOLIO MANAGEMENT" is
amended by replacing the first paragraph with the following text:

       The lead  portfolio  manager of the Fund since 1995 is Thomas Latta.  Mr.
       Latta is a vice president of TGBM. He attended the University of Missouri
       and New York University. Before joining the Templeton  organization  in
       1991, Mr.Latta worked as a portfolio manager with Forester & Hairston, a
       Houston based global fixed income  investment  management  firm. Prior to
       that, Mr. Latta spent seven years with Merrill Lynch, Pierce, Fenner &
       Smith Incorporated, first as part of an investment advisory team to the
       Saudi  Arabian  Monetary  Authority  and then  working in the  structured
       products group in New York. In that position he developed asset-liability
       management strategies for large ERISA plans. Mr. Latta's current research
       responsibilities include the core European markets.

IV.......The discussion under "HOW DO I BUY SHARES? - CUMULATIVE  QUANTITY
DISCOUNTS - CLASS I ONLY" is amended by replacing it with the following text:

       To determine if you may pay a reduced  sales  charge,  the amount of your
       current  purchase  is added to the cost or current  value,  whichever  is
       higher,  of your shares in other  Franklin  Templeton  Funds,  as well as
       those of your  spouse,  children  under  the age of 21 and  grandchildren
       under the age of 21. If you are the sole owner of a company, you may also
       add any company accounts,  including retirement plan accounts.  Companies
       with one or more retirement  plans may add together the total plan assets
       invested in the Franklin  Templeton  Funds to determine  the sales charge
       that applies.



January 16, 1997                                         TL406 STKR5 01/97