N-CSR

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)

Craig S. Tyle, 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:  12/31/20_

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.)

A copy of the notice transmitted to shareholders in reliance on Rule 30e-3 under the 1940 Act that contains disclosures specified by paragraph (c)(3) of that rule is included in the Annual Report. Not Applicable.

Annual

Report

Templeton

Institutional

Funds

December

31,

2020

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

Statements

of

Investments

18

Financial

Statements

30

Notes

to

Financial

Statements

33

Report

of

Independent

Registered

Public

Accounting

Firm

46

Tax

Information

47

Board

Members

and

Officers

49

Shareholder

Information

54

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

(USD),

posted

a

+16.82%

total

return

for

the

12

months

ended

December

31,

2020.

1

Stocks

fell

sharply

in

early

2020

as

many

investors

sold

equities

amid

fears

of

a

global

economic

slowdown

due

to

the

novel

coronavirus

(COVID-19)

pandemic.

Global

equities

began

to

rebound

in

late

March

2020

amid

optimism

about

easing

lockdown

restrictions,

vaccine

and

treatment

development

and

economic

stimulus

measures.

Despite

declines

in

September

and

October

due

to

geopolitical

tensions

and

rising

infection

rates,

markets

rebounded

in

November

and

December,

as

positive

sentiment

about

successful

trials

of

COVID-19

vaccines,

the

beginning

of

vaccination

programs

in

some

countries

and

apparent

resolution

of

political

uncertainty

supported

markets.

In

the

U.S.,

pandemic-related

restrictions

caused

stiff

economic

headwinds,

including

mass

layoffs

that

drove

the

unemployment

rate

to

14.8%

in

April

2020.

2

According

to

the

National

Bureau

of

Economic

Research,

the

longest

U.S.

economic

expansion

in

history

ended

in

February,

and

the

country

slipped

into

a

deep

recession.

Equities

began

to

rebound

in

the

spring

amid

the

government’s

fiscal

and

monetary

stimulus,

declining

jobless

claims,

rising

retail

sales

and

optimism

about

treatments

and

potential

vaccines

for

COVID-19.

Following

a

record

annualized

decline

in

second-quarter

gross

domestic

product

(GDP),

resilient

consumer

spending

helped

drive

third-quarter

GDP

to

expand

at

a

record

annualized

rate,

although

growth

slowed

in

the

fourth

quarter.

Equities

continued

to

rise

during

the

summer

but

declined

in

the

fall

due

to

concerns

about

possible

new

restrictions

amid

rising

COVID-19

infection

rates

and

uncertainties

about

additional

fiscal

stimulus

and

the

U.S.

presidential

election.

Despite

signs

that

the

economic

recovery

was

stalling

as

the

unemployment

rate

remained

relatively

high

(6.7%

at

period-end)

and

consumer

spending

declined,

stocks

rallied

in

November

and

December,

buoyed

by

the

outcome

of

the

U.S.

presidential

election,

the

start

of

COVID-19

vaccination

programs

and

the

passage

of

a

new

U.S.

stimulus

bill.

2

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

lowered

the

federal

funds

target

rate

to

a

range

of

0.00%–0.25%

in

March

2020.

The

Fed

also

enacted

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-

ended

bond

purchasing.

Furthermore,

the

Fed

signaled

that

interest

rates

would

potentially

remain

low,

even

if

inflation

moderately

exceeded

its

2%

target.

In

the

eurozone,

the

economy

contracted

again

in

the

fourth

quarter

of

2020,

following

quarter-on-quarter

expansion

in

the

third

quarter

and

contractions

in

the

first

and

second

quarters.

After

several

months

of

gains

due

to

easing

restrictions

and

robust

stimulus

measures,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index

(USD),

declined

in

September

and

October

as

rising

infection

rates

heightened

investor

concerns

that

the

nascent

economic

revival

could

stall.

Nevertheless,

successful

vaccine

development

and

a

Brexit

resolution

supported

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index

(USD),

to

post

a

+5.93%

total

return

for

the

period.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index

(USD),

posted

a

+21.30%

total

return

for

the

12

months

under

review.

1

Although

pandemic-related

lockdowns

derailed

economic

growth

in

early

2020,

sharp

market

declines

were

followed

by

rebounds

as

China’s

economy,

a

key

driver

of

the

region’s

economic

activity,

recovered

from

the

contraction

in

the

first

quarter

and

expanded

during

the

rest

of

2020.

Asian

stocks

rose

as

the

region’s

economies

reopened,

aided

by

robust

stimulus

measures

and

optimism

that

economic

revitalization

would

be

further

spurred

by

COVID-19

vaccines.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index

(USD),

posted

a

+18.69%

total

return

for

the

period,

despite

steep

pandemic-related

declines

in

early

2020,

benefiting

from

improving

economic

activity,

stabilizing

oil

prices

and

U.S.

dollar

weakness.

1

In

spite

of

higher

COVID-19

cases

in

some

countries,

emerging

market

stocks

rallied

near

the

end

of

2020,

bolstered

by

easing

political

uncertainty,

commencement

of

COVID-19

vaccinations

and

rising

commodity

prices.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

December

31,

2020

.

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.

2.

Source:

U.S.

Bureau

of

Labor

Statistics.

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

31,

2020

.

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

+8.95%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Small

Cap

Index,

which

measures

performance

of

global

developed

and

emerging

market

small-cap

equities,

excluding

the

U.S.,

posted

a

+14.67%

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.

This

evaluation

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value.

Manager’s

Discussion

Several

of

the

Fund’s

holdings

performed

well

during

the

12

months

under

review.

Hong

Kong-based

Techtronic

Industries

is

a

leading

global

power

tools

company.

Its

shares

rose

after

the

company

reported

strong

financial

results,

as

it

recovered

quickly

from

weakness

related

to

the

novel

coronavirus

(COVID-19)

pandemic.

In

our

long-

term

view,

we

see

strengthened

prospects

for

the

company,

including

further

market

share

gains

in

the

cordless

space

and

penetration

into

the

light-equipment

market.

German

medical

packaging

firm

Gerresheimer’s

shares

rallied

amid

a

solid

set

of

earnings

results.

We

believe

the

business

remains

resilient

in

the

current

environment,

and

margins

and

revenues

could

accelerate

over

the

longer

term

following

a

period

of

high

investment

by

the

firm’s

new

management

team.

Furthermore,

we

view

Gerresheimer

as

a

defensive

growth

stock

trading

at

what

we

consider

reasonably

inexpensive

valuations.

Logitech

International

is

a

Switzerland-based

computer

peripherals

manufacturer.

Its

shares

rose

after

the

company’s

announcement

of

strong

quarterly

results.

The

company

has

continued

to

benefit

from

COVID-19-

related

work-from-home

trends.

In

May

2020,

company

management

announced

a

dividend

increase

and

a

substantial

share

buyback

plan,

and

numerous

Wall

Street

analysts

upgraded

their

price

targets.

Geographic

Composition

12/31/20

%

of

Total

Net

Assets

Europe

45.6%

Asia

39.9%

North

America

5.6%

Latin

America

&

Caribbean

3.9%

Middle East & Africa

0.9%

Short-Term

Investments

&

Other

Net

Assets

4.1%

1.

Source:

Morningstar.

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.

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

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

19

.

Foreign

Smaller

Companies

Series

4

ftinstitutional.com

Annual

Report

In

contrast,

the

Fund

had

some

underperformers

during

the

period

under

review.

Based

in

the

Bahamas,

OneSpaWorld

Holdings

operates

spas

on

cruise

ships.

The

company

has

a

dominant

market

share

in

outsourced

maritime

health

and

wellness,

is

significantly

larger

than

its

next

largest

competitor

and

has

been

a

share

gainer

over

time.

The

logistics

required

to

staff

cruise

ship

spas

on

a

global

basis

makes

the

business

very

difficult

to

replicate,

an

advantage

we

see

strengthening

as

the

industry

grows

and

becomes

more

complex.

Its

shares

declined

due

to

COVID-19

fears

and

the

subsequent

impact

on

travel-related

industries.

To

bolster

its

financial

flexibility,

the

company

has

repatriated

cruise

ship

staff,

furloughed

most

of

its

land-based

spa

staff

in

the

U.S.

and

the

Caribbean,

and

eliminated

all

non-

essential

operating

and

capital

expenditures.

The

shares

of

Belgium-based

Barco,

a

market

leader

in

cinema

projection,

wireless

meeting-room

technology

and

displays

for

health

care,

declined

due

to

a

decrease

in

reported

profits

during

the

period.

We

believe

the

upcoming

projector-upgrade

wave

should

drive

a

return

to

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

a

clear

potential

for

further

growth.

Italy-based

Technogym

is

the

world’s

second-largest

gym

equipment

manufacturer.

The

company

has

a

healthy

global

market

share,

and

recent

efforts

to

expand

revenue

in

the

U.S.

look

promising

to

us.

Since

its

creation,

Technogym

has

built

its

brand

on

robust

research

and

technological

capabilities,

innovative

design

and

one

of

the

widest

product

ranges

in

the

industry.

Technogym

has

experienced

strong

organic

growth,

and

we

believe

its

pricing

power

and

ongoing

focus

on

efficiencies

could

continue

to

lead

to

high

profit

margins

and

free

cash

flow

generation.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund's

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

12

months

ended

December

31,

2020,

the

U.S.

dollar

declined

in

value

relative

to

most

currencies.

As

a

result,

the

Fund's

performance

was

positively

affected

by

the

portfolio's

investment

predominantly

in

securities

with

non-

U.S.

currency

exposure.

However,

one

cannot

expect

the

same

result

in

future

periods.

Effective

January

1,

2021,

the

Fund

named

Harlan

B.

Hodes

lead

portfolio

manager

and

added

David

A.

Tuttle

and

Heather

Waddell

as

portfolio

managers.

Portfolio

Composition

12/31/20

%

of

Total

Net

Assets

Machinery

13.1%

Leisure

Products

8.7%

Electronic

Equipment,

Instruments

&

Components

7.4%

Capital

Markets

4.8%

Professional

Services

4.7%

Textiles,

Apparel

&

Luxury

Goods

4.6%

Food

Products

4.2%

Specialty

Retail

3.4%

Banks

3.1%

Technology

Hardware,

Storage

&

Peripherals

3.1%

Food

&

Staples

Retailing

3.1%

Life

Sciences

Tools

&

Services

3.0%

Metals

&

Mining

2.3%

Containers

&

Packaging

2.2%

Auto

Components

2.1%

Other

26.1%

Short-Term

Investments

&

Other

Net

Assets

4.1%

Top

10

Holdings

12/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Interpump

Group

SpA

2.0%

Machinery,

Italy

Thule

Group

AB

1.9%

Leisure

Products,

Sweden

Bucher

Industries

AG

1.9%

Machinery,

Switzerland

Granges

AB

1.8%

Metals

&

Mining,

Sweden

Huhtamaki

OYJ

1.8%

Containers

&

Packaging,

Finland

Logitech

International

SA

1.8%

Technology

Hardware,

Storage

&

Peripherals,

Switzerland

Siegfried

Holding

AG

1.7%

Life

Sciences

Tools

&

Services,

Switzerland

Technogym

SpA

1.6%

Leisure

Products,

Italy

Dometic

Group

AB

1.6%

Auto

Components,

Sweden

Tsumura

&

Co.

1.5%

Pharmaceuticals,

Japan

Foreign

Smaller

Companies

Series

5

ftinstitutional.com

Annual

Report

Thank

you

for

your

continued

participation

in

Foreign

Smaller

Companies

Series.

We

look

forward

to

serving

your

future

investment

needs.

Harlan

B.

Hodes,

CPA

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

2020,

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,

2020

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

12/31/20

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

1

Average

Annual

Total

Return

2

–

1-Year

+8.95%

+8.95%

5-Year

+45.18%

+7.74%

10-Year

+88.48%

+6.54%

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

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.

1/1/11–

12/31/20

Foreign

Smaller

Companies

Series

Performance

Summary

8

ftinstitutional.com

Annual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Smaller,

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

larger,

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.

Current

uncertainty

concerning

the

economic

consequences

of

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

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.

3.

Source:

Morningstar.

The

MSCI

ACWI

ex

USA

Small

Cap

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

performance

of

small-

cap

equity

securities

of

global

developed

and

emerging

markets,

excluding

the

U.S.

4.

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

(1/1/20–12/31/20)

Net

Investment

Income

Long-Term

Capital

Gain

Total

$0.2236

$0.0595

$0.2831

Total

Annual

Operating

Expenses

4

1.03%

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

184/366

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

7/1/20

Ending

Account

Value

12/31/20

Expenses

Paid

During

Period

7/1/20–12/31/20

1,2

Ending

Account

Value

12/31/20

Expenses

Paid

During

Period

7/1/20–12/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

$1,000

$1,292.47

$5.92

$1,019.97

$5.22

1.03%

10

ftinstitutional.com

Annual

Report

International

Equity

Series

This

annual

report

for

International

Equity

Series

(Fund)

covers

the

fiscal

year

ended

December

31,

2020

.

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

+5.30%

cumulative

total

return

for

the

12

months

under

review.

1

For

comparison,

the

Fund’s

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index,

which

measures

stock

market

performance

in

global

developed

and

emerging

markets

excluding

the

U.S.,

posted

a

+11.13%

total

return

for

the

period

under

review.

2

The

Fund’s

other

benchmark,

the

MSCI

Europe,

Australasia,

Far

East

(EAFE)

Index,

which

measures

stock

market

performance

in

global

developed

markets

excluding

the

U.S.

and

Canada,

posted

a

+8.28%

total

return.

2

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

14

.

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

investment

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.

This

evaluation

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

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.

Manager’s

Discussion

2020

was

a

year

of

surprises

and

challenges,

but

also

opportunities.

On

the

one

hand,

the

disconnect

between

asset

prices

and

economic

fundamentals

reached

new

extremes,

creating

headwinds

for

many

price-disciplined

investors.

On

the

other

hand,

growing

market

imbalances

and

renewed

volatility

enabled

us

to

reposition

and

ultimately

strengthen

portfolios

as

opportunities

emerged.

Diversification

was

a

big

strategic

initiative

in

2020,

and

not

just

across

sectors

and

regions.

We

sought

genuine

diversification

among

value

classifications,

economic

exposures

and

risk

profiles

to

seek

to

construct

more

dynamic,

resilient

portfolios.

To

accomplish

this

diversification,

we

broadened

our

search

for

long-term

value,

including

among

higher-quality

and

mispriced

growth

stocks

where

attractive

fundamentals

looked

sufficiently

undervalued.

Finding

what

we

consider

mispriced

quality

and

growth

characteristics

has

been

challenging

given

the

limited

quality

and

growth

opportunities

in

non-U.S.

markets

relative

to

the

U.S.

(as

of

December

31,

2020,

the

MSCI

ACWI

Quality

Index

is

split

roughly

65%/35%

in

favor

of

U.S.

versus

non-U.S.

stocks,

while

the

ACWI

Growth

Index

is

split

roughly

57%/43%

in

favor

of

the

U.S.).

Growth

and

quality

Geographic

Composition

12/31/20

%

of

Total

Net

Assets

Asia

43.2%

Europe

40.5%

Latin

America

&

Caribbean

3.5%

North

America

1.3%

Short-Term

Investments

&

Other

Net

Assets

11.5%

1.

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

1e

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.

2.

Source:

Morningstar.

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.

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

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

19

.

International

Equity

Series

11

ftinstitutional.com

Annual

Report

are

also

more

expensive

internationally

(relative

to

the

broader

market),

in

our

analysis,

than

they

are

in

the

U.S.,

further

complicating

our

efforts

to

buy

stocks

with

what

we

consider

attractive

fundamentals

at

a

discount.

Though

we

ultimately

did

find

creative,

price-disciplined

ways

to

diversify

our

value

profile,

we

still

struggled

to

keep

up

with

the

Fund’s

benchmark

index,

the

MSCI

ACWI

ex

USA

Index,

in

a

year

we

believe

is

characterized

by

speculative

fervor.

We

entered

2020

positioned

conservatively,

having

increased

defensive

exposures

in

late

2019.

We

could

not

have

anticipated

that

a

global

pandemic

would

send

stocks

sharply

lower

in

February

and

March

2020,

only

that

the

market

looked

vulnerable

to

disruption.

Our

defensive

bias

was

helpful

during

the

market

selloff,

and

as

2020

progressed

and

the

reality

of

a

coordinated,

state-sponsored

recovery

took

hold,

we

added

risk

to

the

portfolio.

We

remained

cautious

on

traditional

value

sectors

such

as

energy,

financials

and

even

health

care

given

growing

structural

and

regulatory

risks.

However,

we

found

a

number

of

what

we

consider

interesting

opportunities

among

industrial

cyclicals

as

well

as

high-quality

companies

at

the

epicenter

of

the

novel

coronavirus

(COVID-19)

pandemic

that

we

felt

were

oversold.

These

companies

performed

well

in

the

reflationary

environment

that

characterized

most

of

2020

and

gave

the

portfolio

a

more

dynamic

value

profile.

Ultimately,

however,

the

bulk

of

recovery

gains

in

2020

were

led

by

the

same

quality

and

growth

styles

that

have

dominated

this

cycle.

Given

the

premium

commanded

by

such

characteristics,

we

simply

did

not

have

enough

exposure

to

market-leading

themes,

which

were

expensive

based

on

our

analysis,

to

keep

up

with

the

benchmark

during

this

period

of

extraordinary

stimulus

and

reflation.

From

a

sector

standpoint,

relative

weakness

was

largely

attributable

to

stock

selection

in

the

communication

services

and

health

care

sectors,

which

more

than

offset

the

benefit

of

overweightings

in

these

sectors,

as

well

as

stock

selection

and

an

underweighting

in

the

consumer

discretionary

sector.

Japanese

telecommunication

services

firm

KDDI

was

the

biggest

relative

detractor

in

the

communication

services

sector,

declining

after

regulatory

risk

spiked

following

an

unexpected

leadership

change

in

Japan

that

saw

Yoshihide

Suga,

a

politician

who

has

advocated

for

increased

competition

in

the

telecommunication

services

industry,

become

prime

minister.

We

believe

that

when

circumstances

materially

change,

we

must

process

the

new

information

and

reassess

our

thesis,

which

in

this

case

led

us

to

exit

the

position.

German

pharmaceuticals

and

agricultural

chemicals

firm

Bayer

was

the

biggest

health

care

sector

detractor.

The

market

has

remained

skeptical

about

the

finality

of

Bayer’s

complex

US$12

billion

settlement

to

resolve

litigation

stemming

from

its

acquisition

of

Monsanto

(not

a

Fund

holding),

the

manufacturer

of

the

controversial

weed-killer

Roundup.

Adding

to

the

negative

sentiment,

at

the

end

of

2020’s

third

quarter,

company

management

issued

a

profit

warning

for

2021.

Despite

such

setbacks,

we

believe

the

stock

remains

exceedingly

cheap

and

the

market

will

soon

begin

to

look

beyond

the

litigation

issues

and

focus

on

the

fundamentals

of

the

underlying

business.

There

were

no

consumer

discretionary

stocks

among

the

10

biggest

detractors.

Turning

to

contributors,

stock

selection

in

and

a

favorable

overweighted

allocation

to

materials

made

a

big

positive

impact

in

2020.

Japanese

miner

and

refiner

Sumitomo

Metal

Mining

and

Canadian

precious

metals

firms

Wheaton

Precious

Metals,

which

has

operations

in

Brazil,

and

Barrick

Gold

(not

part

of

the

benchmark

index)

all

finished

among

the

top

10

relative

contributors.

We

have

maintained

precious

metals

exposure

in

the

portfolio

due

to

the

uncorrelated

return

profile

of

the

asset

class

and

the

hedge-like

characteristics

it

provides

amid

concerns

about

excess

debt,

economic

turmoil

and

the

potentially

inflationary

impact

of

extreme

monetary

accommodation.

This

strategy

significantly

benefited

performance

as

2020

progressed

and

the

price

of

gold

rose

to

a

record

high

before

giving

back

some

gains

in

the

final

month

of

the

period.

From

a

regional

standpoint,

stock

selection

in

Asia

detracted,

pressured

by

Japan.

We

continue

to

like

the

fundamental

case

for

Japanese

equities.

Abenomics

has

Portfolio

Composition

12/31/20

%

of

Total

Net

Assets

Pharmaceuticals

6.9%

Metals

&

Mining

5.8%

Technology

Hardware,

Storage

&

Peripherals

5.1%

Banks

4.9%

Oil,

Gas

&

Consumable

Fuels

4.8%

Electronic

Equipment,

Instruments

&

Components

4.7%

Semiconductors

&

Semiconductor

Equipment

4.5%

Multi-Utilities

4.2%

Beverages

3.7%

Automobiles

3.7%

Diversified

Telecommunication

Services

3.4%

Chemicals

3.0%

Hotels,

Restaurants

&

Leisure

2.7%

Insurance

2.7%

Other

28.4%

Short-Term

Investments

&

Other

Net

Assets

11.5%

International

Equity

Series

12

ftinstitutional.com

Annual

Report

encouraged

genuine

reform,

including

accommodative

monetary

policy,

lower

corporate

tax

rates,

deregulation,

corporate

governance

reforms

and

greater

openness

to

trade

and

immigration;

these

initiatives

are

likely

to

continue

under

new

Prime

Minister

Suga.

We

also

like

the

bottom-up

opportunities

in

the

Japanese

market,

as

many

companies,

in

our

view,

still

look

relatively

cheap

and

offer

an

interesting

combination

of

defensive

characteristics

(diverse

revenues

and

cash-rich

balance

sheets)

as

well

as

exposure

to

high-growth

end-markets

such

as

China

and

industries

such

as

technology

and

automation.

Finally,

we

believe

some

Japanese

companies

may

offer

good

inflation

protection

given

elevated

commodity

exposure

and

a

stable

base

currency.

Stock

selection

in

Europe

also

detracted,

pressured

by

France

and

the

U.K.

Costs

and

trade

friction

will

inevitably

rise

with

Brexit,

but

we

believe

that

as

such

concerns

get

discounted

in

asset

prices,

opportunities

will

continue

to

emerge.

Based

on

our

analysis,

the

U.K.

is

now

one

of

the

cheapest

developed

markets

in

the

world,

along

with

Japan,

and

as

in

Japan,

numerous

U.K.

companies

generate

a

large

proportion

of

their

revenues

abroad.

Conversely,

Canada

was

the

biggest

country

contributor

during

the

period,

led

by

the

aforementioned

precious

metals

firms.

The

portfolio

also

benefited

from

a

significant

retroactive

European

Union

tax

reclaim

that

was

posted

during

2020’s

fourth

quarter.

As

we

enter

2021,

rarely

has

the

disconnect

between

corporate

fundamentals

and

share

prices

been

so

stark.

Corporate

failures

have

been

deferred

by

government

intervention,

but

not

avoided,

which

is

particularly

the

case

in

industries

where

the

COVID-19

pandemic

has

accelerated

the

downfall

of

already

struggling

companies.

Then

there

are

the

structurally

challenged

industries

that

are

not

directly

impacted

by

the

pandemic,

but

nevertheless

remain

in

varying

stages

of

terminal

decline.

These

company

and

industry

challenges

suggest

to

us

that

a

credit

cycle,

while

temporarily

deferred,

could

return

in

2021

with

negative

implications

for

future

lending

growth

and

bank

sector

profits.

We

also

expect

increasing

political

pressure

to

tax

corporate

profits

and

repair

government

balance

sheets,

even

if

just

to

improve

optics

and

fend

off

criticism

of

government

profligacy.

Given

such

risks,

we

are

not

inclined

to

buy

highly

indebted

companies

to

try

to

keep

up

with

a

so-called

“value

rally,”

as

we

believe

that

our

more

flexible

and

diversified

approach

to

value

investing

will

generate

more

sustainable

returns

for

our

clients.

Navigating

near-term

uncertainty

is

challenging,

especially

with

so

many

major

changes

afoot

in

the

world.

In

this

environment,

we

believe

that

sensibly

diversified,

well-balanced

portfolios

offer

considerable

optionality

and

agility.

We

think

2020

will

likely

prove

to

have

been

a

tipping

point

for

many

major

themes—shareholder

capitalism,

the

role

of

government,

digitalization,

climate

change,

de-globalization,

demographics

and,

likely,

inflation.

We

are

thinking

hard

about

how

these

issues

are

likely

to

evolve

over

the

long

term.

We

will

spend

more

time

discussing

these

scenarios

in

the

year

ahead

while

working

hard

to

ensure

that

our

portfolios

are

positioned

on

the

right

side

of

unfolding

societal

and

economic

shifts.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund's

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

12

months

ended

December

31,

2020,

the

U.S.

dollar

declined

in

value

relative

to

most

currencies.

As

a

result,

the

Fund's

performance

was

positively

affected

by

the

portfolio's

investment

predominantly

in

securities

with

non-

U.S.

currency

exposure.

However,

one

cannot

expect

the

same

result

in

future

periods.

Top

10

Holdings

12/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Samsung

Electronics

Co.

Ltd.

3.8%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Deutsche

Telekom

AG

3.4%

Diversified

Telecommunication

Services,

Germany

E.ON

SE

2.7%

Multi-Utilities,

Germany

AIA

Group

Ltd.

2.7%

Insurance,

Hong

Kong

Hitachi

Ltd.

2.6%

Electronic

Equipment,

Instruments

&

Components,

Japan

Sony

Corp.

2.5%

Household

Durables,

Japan

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

2.5%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Komatsu

Ltd.

2.3%

Machinery,

Japan

Sumitomo

Mitsui

Financial

Group,

Inc.

2.3%

Banks,

Japan

BAE

Systems

plc

2.3%

Aerospace

&

Defense,

United

Kingdom

International

Equity

Series

13

ftinstitutional.com

Annual

Report

Thank

you

for

your

continued

participation

in

International

Equity

Series.

We

look

forward

to

serving

your

future

investment

needs.

Antonio

T.

Docal,

CFA

Lead

Portfolio

Manager

Peter

A.

Nori,

CFA

Matthew

R.

Nagle,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

2020,

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.

Performance

Summary

as

of

December

31,

2020

International

Equity

Series

14

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

12/31/20

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

+5.30%

+5.30%

5-Year

+24.53%

+4.48%

10-Year

+42.63%

+3.61%

Service

1-Year

+5.16%

+5.16%

5-Year

+23.53%

+4.32%

10-Year

+40.43%

+3.45%

See

page

16

for

Performance

Summary

footnotes.

International

Equity

Series

Performance

Summary

15

ftinstitutional.com

Annual

Report

See

page

16

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$1,000,000

Investment

1,2

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

(1/1/11–

12/31/20

)

Service

Shares

(1/1/11–

12/31/20

)

International

Equity

Series

Performance

Summary

16

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.

Current

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Value

securities

may

not

increase

in

price

as

anticipated

or

may

decline

further

in

value.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

contractually

guaranteed

through

4/30/21.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

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

1e

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:

Morningstar.

The

MSCI

ACWI

ex

USA

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

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

equity

market

performance

of

global

developed

markets

excluding

the

U.S.

and

Canada.

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

(1/1/20–12/31/20)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

Primary

$0.6715

$0.3603

$1.0318

Service

$0.6528

$0.3603

$1.0131

Total

Annual

Operating

Expenses

6

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

Primary

0.81%

0.83%

Service

0.96%

0.98%

Your

Fund’s

Expenses

International

Equity

Series

17

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

184/366

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

7/1/20

Ending

Account

Value

12/31/20

Expenses

Paid

During

Period

7/1/20–12/31/20

1,2

Ending

Account

Value

12/31/20

Expenses

Paid

During

Period

7/1/20–12/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

Primary

$1,000

$1,238.21

$4.72

$1,020.92

$4.26

0.84%

Service

$1,000

$1,239.70

$5.50

$1,020.23

$4.96

0.98%

Templeton

Institutional

Funds

Financial

Highlights

Foreign

Smaller

Companies

Series

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

Year

Ended

December

31,

2020

2019

2018

2017

2016

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$21.40

$17.96

$25.08

$19.93

$20.90

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.17

0.30

0.37

0.30

0.29

Net

realized

and

unrealized

gains

(losses)

...........

1.74

3.79

(4.97)

6.49

(0.48)

Total

from

investment

operations

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

1.91

4.09

(4.60)

6.79

(0.19)

Less

distributions

from:

Net

investment

income

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

(0.22)

(0.37)

(0.21)

(0.68)

(0.41)

Net

realized

gains

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

(0.06)

(0.28)

(2.31)

(0.96)

(0.37)

Total

distributions

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

(0.28)

(0.65)

(2.52)

(1.64)

(0.78)

Net

asset

value,

end

of

year

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

$23.03

$21.40

$17.96

$25.08

$19.93

Total

return

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

8.95%

22.86%

(18.48)%

34.18%

(0.85)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.04%

1.02%

1.01%

0.99%

0.99%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.03%

1.02%

c

1.00%

d

0.98%

d

0.98%

d

Net

investment

income

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

0.87%

1.48%

1.54%

1.28%

1.44%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$725,098

$782,971

$739,576

$1,040,180

$931,879

Portfolio

turnover

rate

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

34.89%

39.48%

34.10%

25.97%

21.36%

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

Statement

of

Investments,

December

31,

2020

Foreign

Smaller

Companies

Series

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

95.3%

Bahamas

1.4%

OneSpaWorld

Holdings

Ltd.

........

Diversified

Consumer

Services

972,905

$

9,865,257

Belgium

2.3%

Barco

NV

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

Electronic

Equipment,

Instruments

&

Components

325,708

7,085,661

Fagron

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

Health

Care

Providers

&

Services

254,090

5,909,163

a,b

Kinepolis

Group

NV

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

Entertainment

86,611

3,673,275

16,668,099

Brazil

1.9%

Camil

Alimentos

SA

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

Food

Products

3,279,000

6,978,475

a

M

Dias

Branco

SA

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

Food

Products

1,038,600

6,824,021

13,802,496

Canada

4.4%

Canaccord

Genuity

Group,

Inc.

......

Capital

Markets

1,153,038

10,115,482

a,b

Canada

Goose

Holdings,

Inc.

.......

Textiles,

Apparel

&

Luxury

Goods

118,000

3,510,038

Canadian

Western

Bank

...........

Banks

381,031

8,572,524

Computer

Modelling

Group

Ltd.

......

Energy

Equipment

&

Services

1,290,704

4,951,368

North

West

Co.,

Inc.

(The)

..........

Food

&

Staples

Retailing

189,700

4,837,566

31,986,978

China

3.8%

a

Goodbaby

International

Holdings

Ltd.

.

Leisure

Products

3,393,800

459,671

Greatview

Aseptic

Packaging

Co.

Ltd.

.

Containers

&

Packaging

5,600,200

3,277,339

Hollysys

Automation

Technologies

Ltd.

Electronic

Equipment,

Instruments

&

Components

354,800

5,212,012

c

Shanghai

Haohai

Biological

Technology

Co.

Ltd.,

H,

144A,

Reg

S

.........

Biotechnology

564,000

3,396,914

a,b,c

Xiabuxiabu

Catering

Management

China

Holdings

Co.

Ltd.,

144A,

Reg

S

....

Hotels,

Restaurants

&

Leisure

3,183,000

7,273,914

Xtep

International

Holdings

Ltd.

......

Textiles,

Apparel

&

Luxury

Goods

15,659,688

7,825,022

27,444,872

Denmark

0.6%

a

Matas

A/S

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

Specialty

Retail

324,000

4,595,217

a

Finland

2.7%

Fiskars

OYJ

Abp

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

Household

Durables

125,674

2,306,102

Huhtamaki

OYJ

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

Containers

&

Packaging

249,629

12,946,218

Metso

Outotec

OYJ

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

Machinery

427,234

4,292,924

19,545,244

France

2.5%

Beneteau

SA

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

Leisure

Products

369,256

4,240,005

Nexans

SA

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

Electrical

Equipment

110,585

8,002,230

a,b

Solutions

30

SE

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

IT

Services

470,874

6,058,594

18,300,829

Germany

5.9%

Gerresheimer

AG

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

Life

Sciences

Tools

&

Services

57,929

6,247,234

Grand

City

Properties

SA

..........

Real

Estate

Management

&

Development

268,315

6,932,871

Jenoptik

AG

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

Electronic

Equipment,

Instruments

&

Components

224,637

6,861,822

b

Rational

AG

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

Machinery

10,939

10,176,820

Stabilus

SA

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

Machinery

139,574

9,867,347

Templeton

Institutional

Funds

Statement

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)

Germany

(continued)

a

VIA

Optronics

AG,

ADR

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

Electronic

Equipment,

Instruments

&

Components

188,100

$

2,531,826

42,617,920

Greece

0.5%

JUMBO

SA

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

Specialty

Retail

224,430

3,870,455

Hong

Kong

3.6%

Johnson

Electric

Holdings

Ltd.

......

Auto

Components

1,629,741

4,035,760

Techtronic

Industries

Co.

Ltd.

.......

Machinery

771,500

11,027,378

Value

Partners

Group

Ltd.

..........

Capital

Markets

8,132,000

4,287,371

VTech

Holdings

Ltd.

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

Communications

Equipment

907,700

7,045,366

26,395,875

Indonesia

0.7%

XL

Axiata

Tbk

.

PT

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

Wireless

Telecommunication

Services

27,382,900

5,325,747

Israel

0.9%

a

Max

Stock

Ltd.

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

Multiline

Retail

1,514,900

6,723,363

a

Italy

6.1%

a

Brunello

Cucinelli

SpA

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

Textiles,

Apparel

&

Luxury

Goods

89,696

3,916,815

Interpump

Group

SpA

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

Machinery

294,615

14,584,962

a

MARR

SpA

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

Food

&

Staples

Retailing

317,345

6,538,142

a

Sanlorenzo

SpA

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

Leisure

Products

398,605

8,135,544

a,c

Technogym

SpA

,

144A,

Reg

S

......

Leisure

Products

1,001,481

11,337,291

44,512,754

Japan

21.9%

Anicom

Holdings,

Inc.

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

Insurance

910,500

9,514,410

Asahi

Co.

Ltd.

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

Specialty

Retail

190,700

3,000,041

Asics

Corp.

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

Textiles,

Apparel

&

Luxury

Goods

577,100

11,098,501

Bunka

Shutter

Co.

Ltd.

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

Building

Products

410,700

3,877,297

Daibiru

Corp.

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

Real

Estate

Management

&

Development

272,500

3,452,953

Dowa

Holdings

Co.

Ltd.

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

Metals

&

Mining

94,700

3,432,928

en

-japan,

Inc.

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

Professional

Services

141,000

4,235,569

Fuji

Oil

Holdings,

Inc.

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

Food

Products

386,700

11,060,391

Hosokawa

Micron

Corp.

...........

Machinery

81,300

5,010,902

Idec

Corp.

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

Electrical

Equipment

303,500

5,364,666

IDOM,

Inc.

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

Specialty

Retail

940,800

5,001,023

Kobayashi

Pharmaceutical

Co.

Ltd.

...

Personal

Products

28,700

3,507,896

Meitec

Corp.

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

Professional

Services

209,300

10,884,442

Morinaga

&

Co.

Ltd.

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

Food

Products

67,200

2,527,846

Morita

Holdings

Corp.

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

Machinery

226,800

3,858,374

Nichiha

Corp.

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

Building

Products

330,800

10,430,998

Nihon

Parkerizing

Co.

Ltd.

..........

Chemicals

333,700

3,461,318

Nissei

ASB

Machine

Co.

Ltd.

........

Machinery

143,200

8,186,411

Qol

Holdings

Co.

Ltd.

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

Food

&

Staples

Retailing

559,200

6,111,720

Seria

Co.

Ltd.

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

Multiline

Retail

122,900

4,511,703

Shima

Seiki

Manufacturing

Ltd.

......

Machinery

262,500

4,453,595

Square

Enix

Holdings

Co.

Ltd.

.......

Entertainment

142,600

8,645,931

TechnoPro

Holdings,

Inc.

..........

Professional

Services

119,600

9,935,878

Topcon

Corp.

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

Electronic

Equipment,

Instruments

&

Components

242,900

3,022,954

Tsumura

&

Co.

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

Pharmaceuticals

373,100

11,221,618

Zojirushi

Corp.

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

Household

Durables

176,300

3,154,700

158,964,065

Templeton

Institutional

Funds

Statement

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)

Netherlands

4.7%

Aalberts

NV

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

Machinery

85,094

$

3,786,407

a

Accell

Group

NV

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

Leisure

Products

158,434

5,003,495

a

Arcadis

NV

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

Construction

&

Engineering

239,501

7,911,558

c

Flow

Traders,

144A,

Reg

S

.........

Capital

Markets

252,236

8,351,001

a,c

Intertrust

NV,

144A,

Reg

S

.........

Professional

Services

529,084

8,971,781

34,024,242

Norway

0.5%

c

Sbanken

ASA,

144A,

Reg

S

........

Banks

429,148

3,449,009

South

Korea

1.4%

a

BNK

Financial

Group,

Inc.

..........

Banks

768,498

4,019,790

a

DGB

Financial

Group,

Inc.

..........

Banks

1,031,194

6,451,063

10,470,853

Spain

0.9%

a

Construcciones

y

Auxiliar

de

Ferrocarriles

SA

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

Machinery

131,097

6,286,327

a

Sweden

5.7%

Cloetta

AB,

B

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

Food

Products

1,024,180

3,043,239

a,c

Dometic

Group

AB,

144A

..........

Auto

Components

847,389

11,239,186

a,b

Granges

AB

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

Metals

&

Mining

1,062,684

12,989,729

a,c

Thule

Group

AB,

144A,

Reg

S

.......

Leisure

Products

370,219

13,853,326

41,125,480

Switzerland

7.5%

Bucher

Industries

AG

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

Machinery

29,805

13,670,433

a

Landis+Gyr

Group

AG

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

Electronic

Equipment,

Instruments

&

Components

96,860

7,609,343

b

Logitech

International

SA

..........

Technology

Hardware,

Storage

&

Peripherals

133,100

12,935,989

a

Siegfried

Holding

AG

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

Life

Sciences

Tools

&

Services

16,416

12,081,897

Tecan

Group

AG

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

Life

Sciences

Tools

&

Services

6,676

3,274,460

a

Zur

Rose

Group

AG

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

Food

&

Staples

Retailing

15,287

4,905,223

54,477,345

Taiwan

7.5%

Chicony

Electronics

Co.

Ltd.

........

Technology

Hardware,

Storage

&

Peripherals

3,094,037

9,506,267

Giant

Manufacturing

Co.

Ltd.

........

Leisure

Products

990,482

9,703,006

King

Yuan

Electronics

Co.

Ltd.

......

Semiconductors

&

Semiconductor

Equipment

6,907,000

8,559,869

Merida

Industry

Co.

Ltd.

...........

Leisure

Products

1,227,000

10,308,306

Nan

Pao

Resins

Chemical

Co.

Ltd.

...

Chemicals

529,100

2,942,198

Nien

Made

Enterprise

Co.

Ltd.

......

Household

Durables

514,000

5,975,035

Quang

Viet

Enterprise

Co.

Ltd.

......

Textiles,

Apparel

&

Luxury

Goods

88,700

341,591

Tripod

Technology

Corp.

...........

Electronic

Equipment,

Instruments

&

Components

1,582,000

6,688,666

54,024,938

Thailand

1.0%

Hana

Microelectronics

PCL

.........

Electronic

Equipment,

Instruments

&

Components

5,663,100

7,501,299

United

Kingdom

5.7%

a

Coats

Group

plc

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

Textiles,

Apparel

&

Luxury

Goods

3,482,467

3,208,998

a

Greggs

plc

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

Hotels,

Restaurants

&

Leisure

250,735

6,135,838

Man

Group

plc

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

Capital

Markets

4,689,886

8,856,104

a

Oxford

Instruments

plc

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

Electronic

Equipment,

Instruments

&

Components

269,731

7,362,424

Rathbone

Brothers

plc

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

Capital

Markets

148,999

3,136,219

Templeton

Institutional

Funds

Statement

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

Kingdom

(continued)

Stock

Spirits

Group

plc

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

Beverages

1,197,234

$

4,391,214

a,c

Watches

of

Switzerland

Group

plc,

144A

Specialty

Retail

993,466

7,866,665

40,957,462

United

States

1.2%

Axis

Capital

Holdings

Ltd.

..........

Insurance

85,130

4,289,701

a

Livent

Corp.

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

Chemicals

231,100

4,353,924

8,643,625

Total

Common

Stocks

(Cost

$459,079,419)

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

691,579,751

Preferred

Stocks

0.5%

Brazil

0.5%

a,d

Alpargatas

SA,

0.13%

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

Textiles,

Apparel

&

Luxury

Goods

434,400

3,522,326

a

Total

Preferred

Stocks

(Cost

$1,114,971)

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

3,522,326

Warrants

a

a

a

a

a

Warrants

0.1%

Bahamas

0.1%

a

OneSpaWorld

Holdings

Ltd.

,

3/19/24

..

Diversified

Consumer

Services

202,835

614,590

Total

Warrants

(Cost

$–)

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

614,590

Total

Long

Term

Investments

(Cost

$460,194,390)

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

695,716,667

Short

Term

Investments

4.8%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

0.4%

United

States

0.4%

e

FFCB,

1/04/21

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

1,900,000

1,900,000

e

FHLB,

1/04/21

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

1,300,000

1,300,000

3,200,000

Total

U.S.

Government

and

Agency

Securities

(Cost

$3,199,998)

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

3,200,000

Industry

Shares

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

4.4%

Money

Market

Funds

4.4%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

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

31,885,434

31,885,434

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$31,885,434)

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

31,885,434

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$35,085,432

)

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

35,085,434

a

a

a

a

Total

Investments

(Cost

$495,279,822)

100.7%

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

$730,802,101

Other

Assets,

less

Liabilities

(0.7)%

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

(5,704,413)

Net

Assets

100.0%

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

$725,097,688

a

a

a

Templeton

Institutional

Funds

Statement

of

Investments

Foreign

Smaller

Companies

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

23

See

Abbreviations

on

page

45

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

2020.

See

Note

1(d).

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,

2020,

the

aggregate

value

of

these

securities

was

$75,739,087,

representing

10.4%

of

net

assets.

d

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

e

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

f

See

Note

1(d)

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

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

Year

Ended

December

31,

2020

2019

2018

2017

2016

Primary

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$15.54

$14.87

$21.99

$18.65

$19.05

Income

from

investment

operations

a

:

Net

investment

income

b

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

1.03

c

0.64

0.42

0.45

0.45

Net

realized

and

unrealized

gains

(losses)

...........

(0.32)

1.06

(3.66)

3.81

(0.20)

Total

from

investment

operations

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

0.71

1.70

(3.24)

4.26

0.25

Less

distributions

from:

Net

investment

income

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

(0.67)

(1.02)

(0.42)

(0.64)

(0.46)

Net

realized

gains

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

(0.36)

(0.01)

(3.46)

(0.28)

(0.19)

Total

distributions

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

(1.03)

(1.03)

(3.88)

(0.92)

(0.65)

Net

asset

value,

end

of

year

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

$15.22

$15.54

$14.87

$21.99

$18.65

Total

return

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

5.30%

11.57%

(14.87)%

22.92%

1.30%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.87%

0.82%

0.80%

0.78%

0.78%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.84%

0.82%

d

0.80%

d,e

0.78%

d

0.78%

d

Net

investment

income

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

7.51%

c

4.13%

1.98%

2.13%

2.44%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$447,139

$1,695,980

$2,785,308

$4,412,494

$4,539,205

Portfolio

turnover

rate

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

89.34%

36.83%

f

25.60%

f

16.39%

f

14.88%

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.

See

Note

11.

Templeton

Institutional

Funds

Financial

Highlights

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

25

a

Year

Ended

December

31,

2020

2019

2018

2017

2016

Service

Shares

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$15.79

$14.97

$22.07

$18.72

$19.11

Income

from

investment

operations

a

:

Net

investment

income

b

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

1.17

c

0.98

0.38

0.39

0.42

Net

realized

and

unrealized

gains

(losses)

...........

(0.47)

0.70

(3.66)

3.85

(0.20)

Total

from

investment

operations

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

0.70

1.68

(3.28)

4.24

0.22

Less

distributions

from:

Net

investment

income

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

(0.65)

(0.85)

(0.36)

(0.61)

(0.42)

Net

realized

gains

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

(0.36)

(0.01)

(3.46)

(0.28)

(0.19)

Total

distributions

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

(1.01)

(0.86)

(3.82)

(0.89)

(0.61)

Net

asset

value,

end

of

year

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

$15.48

$15.79

$14.97

$22.07

$18.72

Total

return

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

5.16%

11.34%

(15.01)%

22.73%

1.15%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.01%

0.97%

0.95%

0.93%

0.93%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.98%

0.97%

d

0.95%

d,e

0.93%

d

0.93%

d

Net

investment

income

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

8.42%

c

3.98%

1.83%

1.98%

2.29%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$448

$700

$5,375

$14,164

$8,624

Portfolio

turnover

rate

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

89.34%

36.83%

f

25.60%

f

16.39%

f

14.88%

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

$0.78

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.

See

Note

11.

Templeton

Institutional

Funds

Statement

of

Investments,

December

31,

2020

International

Equity

Series

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

88.5%

Belgium

1.1%

Anheuser-Busch

InBev

SA/NV

......

Beverages

70,561

$

4,923,013

Brazil

3.5%

Wheaton

Precious

Metals

Corp.

.....

Metals

&

Mining

174,181

7,278,879

Yara

International

ASA

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

Chemicals

198,227

8,223,796

15,502,675

Canada

1.3%

Barrick

Gold

Corp.

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

Metals

&

Mining

256,300

5,838,514

China

3.2%

a

Alibaba

Group

Holding

Ltd.

.........

Internet

&

Direct

Marketing

Retail

230,600

6,706,893

Yum

China

Holdings,

Inc.,

(USD

Traded)

Hotels,

Restaurants

&

Leisure

21,300

1,216,017

b

Yum

China

Holdings,

Inc.,

(HKD

Traded)

Hotels,

Restaurants

&

Leisure

112,150

6,429,773

14,352,683

France

4.9%

Sanofi

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

Pharmaceuticals

74,608

7,231,528

TOTAL

SE

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

Oil,

Gas

&

Consumable

Fuels

188,713

8,145,608

Veolia

Environnement

SA

..........

Multi-Utilities

269,015

6,633,464

22,010,600

Germany

14.3%

a

adidas

AG

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

Textiles,

Apparel

&

Luxury

Goods

18,717

6,809,616

Bayer

AG

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

Pharmaceuticals

127,768

7,527,274

c

Covestro

AG,

144A,

Reg

S

.........

Chemicals

82,195

5,064,524

Deutsche

Telekom

AG

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

Diversified

Telecommunication

Services

833,879

15,221,083

E.ON

SE

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

Multi-Utilities

1,090,124

12,071,701

Fresenius

Medical

Care

AG

&

Co.

KGaA

Health

Care

Providers

&

Services

108,916

9,082,593

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

112,897

4,311,557

Siemens

AG

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

Industrial

Conglomerates

25,766

3,711,653

63,800,001

Hong

Kong

2.7%

AIA

Group

Ltd.

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

Insurance

986,400

12,020,391

Ireland

1.4%

CRH

plc

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

Construction

Materials

148,550

6,317,582

Japan

28.5%

Hitachi

Ltd.

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

Electronic

Equipment,

Instruments

&

Components

290,800

11,477,676

Honda

Motor

Co.

Ltd.

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

Automobiles

310,100

8,749,874

Isuzu

Motors

Ltd.

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

Automobiles

802,100

7,635,701

Kirin

Holdings

Co.

Ltd.

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

Beverages

374,900

8,852,512

Komatsu

Ltd.

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

Machinery

376,400

10,387,995

Kyocera

Corp.

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

Electronic

Equipment,

Instruments

&

Components

155,300

9,532,068

Matsumotokiyoshi

Holdings

Co.

Ltd.

..

Food

&

Staples

Retailing

179,500

7,656,146

Mitsubishi

Electric

Corp.

...........

Electrical

Equipment

595,800

9,004,714

Mitsui

Fudosan

Co.

Ltd.

...........

Real

Estate

Management

&

Development

162,690

3,406,659

Sony

Corp.

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

Household

Durables

112,400

11,326,333

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

211,800

9,421,076

Sumitomo

Mitsui

Financial

Group,

Inc.

.

Banks

333,900

10,350,284

Suntory

Beverage

&

Food

Ltd.

......

Beverages

84,879

3,006,363

Taisei

Corp.

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

Construction

&

Engineering

247,500

8,538,387

Takeda

Pharmaceutical

Co.

Ltd.

.....

Pharmaceuticals

232,528

8,415,043

127,760,831

Templeton

Institutional

Funds

Statement

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

27

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Luxembourg

0.8%

a

ArcelorMittal

SA

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

Metals

&

Mining

157,686

$

3,606,419

a

Netherlands

1.0%

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

28,696

4,562,951

Norway

1.1%

Equinor

ASA

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

Oil,

Gas

&

Consumable

Fuels

282,275

4,763,950

South

Korea

5.0%

KB

Financial

Group,

Inc.

...........

Banks

96,028

3,808,181

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

226,186

16,865,018

Shinhan

Financial

Group

Co.

Ltd.

....

Banks

65,499

1,940,618

22,613,817

Spain

1.6%

Red

Electrica

Corp.

SA

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

Electric

Utilities

347,968

7,144,449

Switzerland

2.7%

Adecco

Group

AG

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

Professional

Services

62,113

4,136,935

Roche

Holding

AG

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

Pharmaceuticals

22,332

7,778,203

11,915,138

Taiwan

3.8%

Catcher

Technology

Co.

Ltd.

........

Technology

Hardware,

Storage

&

Peripherals

783,000

5,755,974

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

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

Semiconductors

&

Semiconductor

Equipment

593,492

11,224,572

16,980,546

United

Kingdom

11.6%

BAE

Systems

plc

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

Aerospace

&

Defense

1,525,984

10,177,186

BP

plc

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

Oil,

Gas

&

Consumable

Fuels

2,497,623

8,619,285

a

Burberry

Group

plc

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

Textiles,

Apparel

&

Luxury

Goods

206,311

5,038,504

CK

Hutchison

Holdings

Ltd.

.........

Industrial

Conglomerates

777,794

5,430,429

Compass

Group

plc

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

Hotels,

Restaurants

&

Leisure

247,320

4,613,191

a

DS

Smith

plc

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

Containers

&

Packaging

1,194,414

6,105,955

a

Informa

plc

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

Media

334,286

2,499,761

a

International

Consolidated

Airlines

Group

SA

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

Airlines

1,585,461

3,450,214

a

Standard

Chartered

plc

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

Banks

949,125

6,027,330

51,961,855

Total

Common

Stocks

(Cost

$298,821,569)

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

396,075,415

a

a

a

a

a

Escrows

and

Litigation

Trusts

0.0%

d

Hemisphere

Properties

India

Ltd.,

Escrow

Account

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

2,094,964

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

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

—

Total

Long

Term

Investments

(Cost

$298,821,569)

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

396,075,415

Templeton

Institutional

Funds

Statement

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

Short

Term

Investments

2.5%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

1.3%

United

States

1.3%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

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

5,645,058

$

5,645,058

Total

Money

Market

Funds

(Cost

$5,645,058)

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

5,645,058

g

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.2%

Money

Market

Funds

1.2%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

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

5,609,390

5,609,390

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$5,609,390)

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

5,609,390

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$11,254,448

)

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

11,254,448

a

a

a

a

Total

Investments

(Cost

$310,076,017)

91.0%

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

$407,329,863

Other

Assets,

less

Liabilities

9.0%

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

40,256,732

Net

Assets

100.0%

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

$447,586,595

a

a

a

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

2020.

See

Note

1(d).

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,

2020,

the

value

of

this

security

was

$5,064,524,

representing

1.1%

of

net

assets.

d

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

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.

g

See

Note

1(d)

regarding

securities

on

loan.

Templeton

Institutional

Funds

Statement

of

Investments

International

Equity

Series

(continued)

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

At

December

31,

2020,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Equity

contracts

MSCI

EAFE

Index

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

Long

228

$

24,291,120

3/19/21

$

531,148

Total

Futures

Contracts

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

$531,148

*

As

of

period

end.

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Assets

and

Liabilities

December

31,

2020

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

Foreign

Smaller

Companies

Series

International

Equity

Series

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$463,394,388

$298,821,569

Cost

-

Non-controlled

affiliates

(Not

e

3d)

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

31,885,434

11,254,448

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$33,917,402

and

$5,470,353

,

respectively)

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

$698,916,667

$396,075,415

Value

-

Non-controlled

affiliates

(Not

e

3d)

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

31,885,434

11,254,448

Cash

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

27,426,476

—

Receivables:

Investment

securities

sold

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

563,433

254,538

Capital

shares

sold

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

443,096

650,655

Dividends

and

interest

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

1,869,774

9,085,749

European

Union

tax

reclaims

(Note

1

e

)

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

332,769

39,992,687

Deposits

with

brokers

for:

Futures

contracts

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

—

1,986,336

Other

assets

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

89

174

Total

assets

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

761,437,738

459,300,002

Liabilities:

Payables:

Investment

securities

purchased

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

2,212,942

57

Capital

shares

redeemed

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

1,548,765

2,633,200

Management

fees

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

570,795

293,507

Transfer

agent

fees

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

11,727

11,825

IRS

closing

agreement

fees

for

European

Union

tax

reclaims

(Not

e

1e)

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

—

2,677,594

Variation

margin

on

futures

contracts

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

—

196,142

Payable

upon

return

of

securities

loaned

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

31,885,434

5,609,390

Accrued

expenses

and

other

liabilities

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

110,387

291,692

Total

liabilities

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

36,340,050

11,713,407

Net

assets,

at

value

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

$725,097,688

$447,586,595

Net

assets

consist

of:

Paid-in

capital

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

$496,478,040

$281,187,451

Total

distributable

earnings

(losses)

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

228,619,648

166,399,144

Net

assets,

at

value

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

$725,097,688

$447,586,595

Shares

outstanding

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

31,490,809

—

Net

asset

value

per

share

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

$23.03

—

International

Equity

Series

Primary

Shares:

Net

assets,

at

value

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

$447,139,078

Shares

outstanding

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

29,374,158

Net

asset

value

per

share

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

$15.22

Service

Shares:

Net

assets,

at

value

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

$447,517

Shares

outstanding

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

28,906

Net

asset

value

per

share

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

$15.48

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Operations

for

the

year

ended

December

31,

2020

ftinstitutional.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

Foreign

Smaller

Companies

Series

International

Equity

Series

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,627,675

and

$3,218,295,

respectively)

Unaffiliated

issuers

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

$11,864,446

$24,047,359

Non-controlled

affiliates

(Note

3d)

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

—

95,383

Interest:

Unaffiliated

issuers

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

—

9,950

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

120,310

5,544

Non-controlled

affiliates

(Note

3d)

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

5,562

4,749

Other

income

(Note

1e)

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

—

53,241,334

Less:

IRS

closing

agreement

fees

for

European

Union

tax

reclaims

(Note

1e)

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

—

(2,677,594)

Total

investment

income

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

11,990,318

74,726,725

Expenses:

Management

fees

(Note

3a)

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

5,998,465

6,946,066

Transfer

agent

fees:

(Note

3c)

    Primary

Shares

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

—

241,103

    Service

Shares

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

—

121

Transfer

agent

fees

(Note

3

c

)

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

168,414

—

Sub-transfer

agent

fees:

(Note

3c)

    Service

Shares

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

—

690

Custodian

fees

(Note

4)

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

83,030

100,938

Reports

to

shareholders

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

23,166

26,852

Registration

and

filing

fees

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

32,720

64,894

Professional

fees

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

111,199

109,139

Trustees'

fees

and

expenses

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

86,266

144,603

Other

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

31,073

122,278

Total

expenses

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

6,534,333

7,756,684

Expenses

waived/paid

by

affiliates

(Note

3d

and

3e)

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

(15,878)

(248,839)

Net

expenses

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

6,518,455

7,507,845

Net

investment

income

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

5,471,863

67,218,880

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$–

and

$368,724,

respectively)

Unaffiliated

issuers

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

13,983,136

81,766,168

Foreign

currency

transactions

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

(191,122)

535,555

Futures

contracts

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

—

1,929,182

Net

realized

gain

(loss)

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

13,792,014

84,230,905

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

30,143,204

(248,370,117)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

108,569

2,543,365

Futures

contracts

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

—

531,148

Net

change

in

unrealized

appreciation

(depreciation)

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

30,251,773

(245,295,604)

Net

realized

and

unrealized

gain

(loss)

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

44,043,787

(161,064,699)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$49,515,650

$(93,845,819)

Templeton

Institutional

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

ftinstitutional.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

Foreign

Smaller

Companies

Series

International

Equity

Series

Year

Ended

December

31,

2020

Year

Ended

December

31,

2019

Year

Ended

December

31,

2020

Year

Ended

December

31,

2019

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$5,471,863

$11,895,673

$67,218,880

$98,629,747

Net

realized

gain

(loss)

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

13,792,014

3,120,067

84,230,905

108,505,678

Net

change

in

unrealized

appreciation

(depreciation)

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

30,251,773

149,654,268

(245,295,604)

42,791,765

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

49,515,650

164,670,008

(93,845,819)

249,927,190

Distributions

to

shareholders:

Primary

Shares

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

—

—

(53,111,315)

(110,720,036)

Service

Shares

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

—

—

(29,760)

(37,634)

Distributions

to

shareholders

.........

(8,851,726)

(24,074,759)

—

—

Total

distributions

to

shareholders

.....

(8,851,726)

(24,074,759)

(53,141,075)

(110,757,670)

Capital

share

transactions:

(Note

2

)

Primary

Shares

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

—

—

(1,101,888,702)

(1,228,181,281)

Service

Shares

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

—

—

(218,302)

(4,991,010)

Capital

share

transactions

(Note

2

)

.....

(98,536,876)

(97,200,893)

—

—

Total

capital

share

transactions

.......

(98,536,876)

(97,200,893)

(1,102,107,004)

(1,233,172,291)

Net

increase

(decrease)

in

net

assets

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

(57,872,952)

43,394,356

(1,249,093,898)

(1,094,002,771)

Net

assets:

Beginning

of

year

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

782,970,640

739,576,284

1,696,680,493

2,790,683,264

End

of

year

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

$725,097,688

$782,970,640

$447,586,595

$1,696,680,493

Templeton

Institutional

Funds

33

ftinstitutional.com

Annual

Report

Notes

to

Financial

Statements

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)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

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

Funds' administrator

has

responsibility

for

oversight

of

valuation,

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

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.

Certain

derivative

financial

instruments

are

centrally

cleared

or

trade

in

the

OTC

market.

The

Funds' pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Funds' net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

T

he

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,

book

values,

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.

Templeton

Institutional

Funds

Notes

to

Financial

Statements

34

ftinstitutional.com

Annual

Report

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

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the Fund.

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,

2020,

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.

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.

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.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

35

ftinstitutional.com

Annual

Report

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.

d.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Funds

receives

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

Fund.

Additionally,

Foreign

Smaller

Companies

Series

received

$2,271,552

in

U.S.

Government

and

Agency

securities

as

collateral.

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.

e.

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).

These

additional

filings

are

subject

to

various

administrative

proceedings

by

the

local

jurisdictions’

tax

authorities

within

the

European

Union,

as

well

as

a

number

of

related

judicial

proceedings.

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.

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

amounts

of

foreign

taxes

Fund

shareholders

can

use

as

tax

credits

in

their

individual

income

tax

returns.

In

the

event

that

EU

reclaims

received

by

the

Funds during

the

fiscal

year

exceed

foreign

withholding

taxes

paid,

and

the Funds

previously

passed

foreign

tax

credit

on

to

its

shareholders,

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,

2020,

certain

or

all

Funds

received

EU

reclaims

in

excess

of

the

foreign

taxes

paid

during

the

year.

International

Equity

Series

determined

to

enter

into

closing

agreement

with

the

IRS

and

recorded

the

estimated

fees

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,

2020, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

36

ftinstitutional.com

Annual

Report

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. 

f.

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.

g.

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.

h.

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)

e.

Income

and

Deferred

Taxes

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

37

ftinstitutional.com

Annual

Report

2.

Shares

of

Beneficial

Interest

At

December

31,

2020,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value)

.

Transactions

in

the

Fund

s

’

shares

were

as

follows:

Foreign

Smaller

Companies

Series

Shares

Amount

Advisor

Class

Year

ended

December

31,

2020

Shares

sold

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

9,412,891

$166,630,256

Shares

issued

in

reinvestment

of

distributions

..........

341,853

7,788,220

Shares

redeemed

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

(14,851,654)

(272,955,352)

Net

increase

(decrease)

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

(5,096,910)

$(98,536,876)

Year

ended

December

31,

2019

Shares

sold

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

8,611,598

$170,364,115

Shares

issued

in

reinvestment

of

distributions

..........

1,009,567

21,290,168

Shares

redeemed

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

(14,221,258)

(288,855,176)

Net

increase

(decrease)

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

(4,600,093)

$(97,200,893)

International

Equity

Series

Shares

Amount

Primary

Shares

Primary

Shares:

Year

ended

December

31,

2020

Shares

sold

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

14,329,539

$202,147,807

Shares

issued

in

reinvestment

of

distributions

..........

3,342,528

46,688,253

Shares

redeemed

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

(97,427,178)

(1,350,724,762)

Net

increase

(decrease)

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

(79,755,111)

$(1,101,888,702)

Year

ended

December

31,

2019

Shares

sold

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

18,050,479

$283,546,929

Shares

issued

in

reinvestment

of

distributions

..........

6,269,496

96,463,056

Shares

redeemed

in-kind

(Note

11

)

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

(2,752,970)

(43,653,289)

Shares

redeemed

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

(99,738,674)

(1,564,537,977)

Net

increase

(decrease)

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

(78,171,669)

$(1,228,181,281)

Service

Shares

Service

Shares:

Year

ended

December

31,

2020

Shares

sold

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

2,179

$29,850

Shares

issued

in

reinvestment

of

distributions

..........

2,098

29,760

Shares

redeemed

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

(19,698)

(277,912)

Net

increase

(decrease)

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

(15,421)

$(218,302)

Year

ended

December

31,

2019

Shares

sold

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

282,815

$4,436,390

Shares

issued

in

reinvestment

of

distributions

..........

2,411

37,634

Shares

redeemed

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

(599,915)

(9,465,034)

Net

increase

(decrease)

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

(314,689)

$(4,991,010)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

38

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

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

International

Equity

Series

pays

an

investment

management

fee

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

year

ended

December

31,

2020,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

Effective

January

1,

2021,

under

a

subadvisory

agreement,

FTIC,

an

affiliate

of

TIC,

will

provide

subadvisory

services

to

Foreign

Smaller

Companies

Series.

The

subadvisory

fee

will

be

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

Templeton

Distributors,

Inc.

(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

39

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.

The

fees

are

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,

2020,

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

for

purposes

other

than

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,

2020,

investments

in

affiliated

management

investment

companies

were

as

follows:

Foreign

Smaller

Companies

Series

International

Equity

Series

Transfer

agent

fees

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

$168,414

$241,224

    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,

0%

.........

$1,722,366

$131,628,025

$(101,464,957)

$

—

$

—

$31,885,434

31,885,434

$5,562

Total

Affiliated

Securities

....

$1,722,366

$131,628,025

$(101,464,957)

$—

$—

$31,885,434

$5,562

International

Equity

Series

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$47,789,147

$807,702,655

$(849,846,744)

$—

$—

$5,645,058

5,645,058

$95,383

3.

Transactions

with

Affiliates

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

40

ftinstitutional.com

Annual

Report

e.

Waiver

and

Expense

Reimbursements

Effective

April

1,

2020,

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,

2021.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses. 

During

the

year ended

December

31,

2020,

there

were

no

credits

earned.

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2020

and

December

31,

2019,

was

as

follows:

At

December

31,

2020,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

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

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$—

$30,877,361

$(25,267,971)

$

—

$

—

$5,609,390

5,609,390

$4,749

Total

Affiliated

Securities

....

$47,789,147

$838,580,016

$(875,114,715)

$—

$—

$11,254,448

$100,132

Foreign

Smaller

Companies

Series

International

Equity

Series

2020

2019

2020

2019

Distributions

paid

from:

Ordinary

income

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

$6,991,704

$13,764,473

$34,560,894

$109,524,076

Long

term

capital

gain

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

1,860,022

10,310,286

18,580,181

1,233,593

$8,851,726

$24,074,759

$53,141,075

$110,757,669

3.

Transactions

with

Affiliates

(continued)

d.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

41

ftinstitutional.com

Annual

Report

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

capital

gains

tax,

foreign

currency

transactions,

corporate

actions,

wash

sales

and

financial

futures

transactions.

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.

In

accordance

with

U.S.

GAAP

permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

At

the

year

ended

December

31,

2020,

such

reclassifications

were

as

follows:

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2020,

were

as

follows:

At

December

31,

2020,

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

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

$504,767,959

$321,568,027

Unrealized

appreciation

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

$253,769,052

$102,280,010

Unrealized

depreciation

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

(27,734,910)

(15,987,027)

Net

unrealized

appreciation

(depreciation)

.......

$226,034,142

$86,292,983

Distributable

earnings:

Undistributed

ordinary

income

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

$135,979

$1,640,123

Undistributed

long

term

capital

gains

...........

2,046,588

40,072,892

Total

distributable

earnings

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

$2,182,567

$41,713,015

International

Equity

Series

Paid-in

Capital

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

$41,764,606

Total

distributable

earnings

(loss)

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

$(41,764,606)

Foreign

Smaller

Companies

Series

International

Equity

Series

Purchases

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

$212,800,378

$756,223,156

Sales

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

$312,421,013

$1,828,570,482

Foreign

Smaller

Companies

Series

International

Equity

Series

Securities

lending

transactions

a

:

Equity

investments

b

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

$31,885,434

$5,609,390

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.

5.

Income

Taxes

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

42

ftinstitutional.com

Annual

Report

7.

Other

Derivative

Information

At

December

31,

2020,

Funds’

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

For

the

year

ended

December

31,

2020,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2020,

the

average

month

end

notional

amount

of

futures

contracts

was

$3,260,371.

See

Note

1(c)

regarding

derivative

financial

instruments. 

8.

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.

Current

political

and

financial

uncertainty

surrounding

the

European

Union

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

Europe.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

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.

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

s

of

Assets

and

Liabilities

Location

Fair

Value

Statement

s

of

Assets

and

Liabilities

Location

Fair

Value

International

Equity

Series

Equity

contracts

...........

Variation

margin

on

futures

contracts

$

531,148

a

Variation

margin

on

futures

contracts

$

—

Total

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

$531,148

$—

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statement

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

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

International

Equity

Series

Equity

contracts

...........

Futures

contracts

$1,929,182

Futures

contracts

$531,148

Total

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

$1,929,182

$531,148

Templeton

Institutional

Funds

Notes

to

Financial

Statements

43

ftinstitutional.com

Annual

Report

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

billion

(Global

Credit

Facility)

which

matured

on

February

5,

2021.

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

5,

2021,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one

year

term,

maturing

February

4,

2022,

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

December

31,

2020,

International

Equity

Series

utilized

the

Global

Credit

facility

by

drawing

down

$182,000,000

on

December

1,

2020.

The

drawdown

was

repaid

on

December

3,

2020.

The

average

borrowing

and

the

average

interest

rate

for

the

days

with

outstanding

borrowings

were

$182,000,000

and

1.15%,

respectively.

TIC

paid

$11,669

for

interest

on

this

borrowing.

During

the

year

ended

December

31,

2020,

Foreign

Smaller

Companies

Series

did

not

use

the

Global

Credit

Facility.

11.

Redemption

In-Kind

During

the

year

ended

December

31,

2019,

International

Equity

Series

realized

$5,298,021

of

net

gains

resulting

from

a

redemption

in-kind

in

which

a

shareholder

redeemed

fund

shares

for

cash

and

securities

held

by

the

Fund.

Because

such

gains

are

not

taxable

to

the

Fund

and

are

not

distributed

to

remaining

shareholders,

they

have

been

reclassified

from

accumulated

net

realized

gains

to

paid-in

capital.

12.

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)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

44

ftinstitutional.com

Annual

Report

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,

2020,

in

valuing

the

Funds'

assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Foreign

Smaller

Companies

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Bahamas

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

$

9,865,257

$

—

$

—

$

9,865,257

Belgium

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

—

16,668,099

—

16,668,099

Brazil

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

—

13,802,496

—

13,802,496

Canada

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

31,986,978

—

—

31,986,978

China

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

5,212,012

22,232,860

—

27,444,872

Denmark

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

4,595,217

—

—

4,595,217

Finland

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

—

19,545,244

—

19,545,244

France

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

—

18,300,829

—

18,300,829

Germany

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

12,708,646

29,909,274

—

42,617,920

Greece

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

—

3,870,455

—

3,870,455

Hong

Kong

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

—

26,395,875

—

26,395,875

Indonesia

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

—

5,325,747

—

5,325,747

Israel

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

—

6,723,363

—

6,723,363

Italy

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

—

44,512,754

—

44,512,754

Japan

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

—

158,964,065

—

158,964,065

Netherlands

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

13,975,276

20,048,966

—

34,024,242

Norway

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

—

3,449,009

—

3,449,009

South

Korea

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

—

10,470,853

—

10,470,853

Spain

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

6,286,327

—

—

6,286,327

Sweden

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

—

41,125,480

—

41,125,480

Switzerland

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

12,935,989

41,541,356

—

54,477,345

Taiwan

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

—

54,024,938

—

54,024,938

Thailand

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

—

7,501,299

—

7,501,299

United

Kingdom

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

7,866,665

33,090,797

—

40,957,462

United

States

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

8,643,625

—

—

8,643,625

Preferred

Stocks

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

—

3,522,326

—

3,522,326

Warrants

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

614,590

—

—

614,590

Short

Term

Investments

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

31,885,434

3,200,000

—

35,085,434

Total

Investments

in

Securities

...........

$146,576,016

$584,226,085

$—

$730,802,101

International

Equity

Series

Assets:

Investments

in

Securities:

Common

Stocks

:

Belgium

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

—

4,923,013

—

4,923,013

Brazil

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

7,278,879

8,223,796

—

15,502,675

Canada

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

5,838,514

—

—

5,838,514

China

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

1,216,017

13,136,666

—

14,352,683

France

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

—

22,010,600

—

22,010,600

Germany

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

—

63,800,001

—

63,800,001

Hong

Kong

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

—

12,020,391

—

12,020,391

Ireland

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

—

6,317,582

—

6,317,582

Japan

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

—

127,760,831

—

127,760,831

Luxembourg

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

—

3,606,419

—

3,606,419

Netherlands

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

4,562,951

—

—

4,562,951

Norway

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

—

4,763,950

—

4,763,950

South

Korea

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

—

22,613,817

—

22,613,817

Spain

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

—

7,144,449

—

7,144,449

Switzerland

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

—

11,915,138

—

11,915,138

12.

Fair

Value

Measurements

(continued)

Templeton

Institutional

Funds

Notes

to

Financial

Statements

45

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. 

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

The

amendments

in

the

ASU

provides

optional

temporary

financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021.

The

ASU

is

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022. Management

has

reviewed

the

requirements

and

believes

the

adoption

of

this

ASU

will

not

have

a

material

impact

on

the

financial

statements.

14.

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

Level

1

Level

2

Level

3

Total

International

Equity

Series

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Taiwan

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

$

—

$

16,980,546

$

—

$

16,980,546

United

Kingdom

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

—

51,961,855

—

51,961,855

Escrows

and

Litigation

Trusts

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

—

—

—

a

—

Short

Term

Investments

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

11,254,448

—

—

11,254,448

Total

Investments

in

Securities

...........

$30,150,809

$377,179,054

$—

$407,329,863

Other

Financial

Instruments:

Futures

contracts

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

$

531,148

$

—

$

—

$

531,148

Total

Other

Financial

Instruments

.........

$531,148

$—

$—

$531,148

a

Includes

securities

determined

to

have

no

value

at

December

31,

2020.

Selected

Portfolio

ADR

American

Depositary

Receipt

FFCB

Federal

Farm

Credit

Banks

Funding

Corp.

FHLB

Federal

Home

Loan

Banks

12.

Fair

Value

Measurements

(continued)

Templeton

Institutional

Funds

Report

of

Independent

Registered

Public

Accounting

Firm

46

ftinstitutional.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

statements

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,

2020,

the

related

statements

of

operations

for

the

year

ended

December

31,

2020,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2020,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2020

(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,

2020,

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,

2020

and

each

of

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2020

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,

2020

by

correspondence

with

the

custodian,

transfer

agents

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

19,

2021

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)

47

ftinstitutional.com

Annual

Report

Under

Section

852(b)(3)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

long

term

capital

gain

dividends

for

the

fiscal

year

ended

December

31,

2020:

Under

Section

871(k)(2)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

short

term

capital

gain

dividends

for

purposes

of

the

tax

imposed

under

Section

871(a)(1)

(A)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

December

31,

2020:

Under

Section

854(b)(1)(B)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

qualified

dividends

for

purposes

of

the

maximum

rate

under

Section

1(h)(11)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

December

31,

2020:

Distributions,

including

qualified

dividend

income,

paid

during

calendar

year

2020

will

be

reported

to

shareholders

on

Form

1099-DIV

by

mid-February

2021.

Shareholders

are

advised

to

check

with

their

tax

advisors

for

information

on

the

treatment

of

these

amounts

on

their

individual

income

tax

returns.

At

December

31,

2020,

more

than

50%

of

the

Foreign

Smaller

Companies

Series’

total

assets

were

invested

in

securities

of

foreign

issuers.

In

most

instances,

foreign

taxes

were

withheld

from

income

paid

to

the

Fund

on

these

investments.

As

shown

in

the

table

below,

the

Fund

hereby

reports

to

shareholders

the

foreign

source

income

and

foreign

taxes

paid,

pursuant

to

Section

853

of

the

Internal

Revenue

Code.

The

following

table

provides

a

detailed

analysis

of

foreign

tax

paid,

foreign

source

income,

and

foreign

source

qualified

dividends

as

reported

by

the

Fund

to

shareholders

of

record.

Foreign

Tax

Paid

Per

Share

is

the

amount

per

share

available

to

you,

as

a

tax

credit

(assuming

you

held

your

shares

in

the

Fund

for

a

minimum

of

16

days

during

the

31-day

period

beginning

15

days

before

the

ex-dividend

date

of

the

Fund’s

distribution

to

which

the

foreign

taxes

relate),

or,

as

a

tax

deduction.

Foreign

Source

Income

Per

Share

is

the

amount

per

share

of

income

dividends

attributable

to

foreign

securities

held

by

the

Fund,

plus

any

foreign

taxes

withheld

on

these

dividends.

The

amounts

reported

include

foreign

source

qualified

dividends

that

have

not

been

adjusted

for

the

rate

differential

applicable

to

such

dividend

income.

1

Foreign

Smaller

Companies

Series

International

Equity

Series

$2,658,578

$56,308,612

Foreign

Smaller

Companies

Series

International

Equity

Series

$13,175

$—

Foreign

Smaller

Companies

Series

International

Equity

Series

$6,409,086

$21,032,007

Class

ForeignTax

Paid

Per

Share

Foreign

Source

Income

Per

Share

Foreign

Source

Qualified

Dividend

Income

Per

Share

Foreign

Smaller

Companies

Series

Fund

Shares

$0.0501

$0.2618

$0.1257

Templeton

Institutional

Funds

Tax

Information

(unaudited)

48

ftinstitutional.com

Annual

Report

1.

Qualified

dividends

are

taxed

at

reduced

long

term

capital

gains

tax

rates.

In

determining

the

amount

of

foreign

tax

credit

that

may

be

applied

against

the

U.S.

tax

liability

of

individuals

receiving

foreign

source

qualified

dividends,

adjustments

may

be

required

to

the

foreign

tax

credit

limitation

calculation

to

reflect

the

rate

differential

applicable

to

such

dividend

income.

The

rules

however

permit

certain

individuals

to

elect

not

to

apply

the

rate

differential

adjustments

for

capital

gains

and/or

dividends

for

any

taxable

year.

Please

consult

your

tax

advisor

and

the

instructions

to

Form

1116

for

more

information.

Foreign

Source

Qualified

Dividends

Per

Share

is

the

amount

per

share

of

foreign

source

qualified

dividends

plus

any

foreign

taxes

withheld

on

these

dividends.

These

amounts

represent

the

portion

of

the

Foreign

Source

Income

Per

Share

that

were

derived

from

qualified

foreign

securities

held

by

the

Fund.

1

At

the

beginning

of

each

calendar

year,

shareholders

will

receive

Form

1099-DIV

which

will

include

their

share

of

taxes

paid

during

the

prior

calendar

year. Shareholders

are

advised

to

check

with

their

tax

advisors

for

information

on

the

treatment

of

these

amounts

on

their

income

tax

returns.

Templeton

Institutional

Funds

Board

Members

and

Officers

49

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

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

125

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

Capital

Corporation

(specialty

finance

company)

(2010-present),

United

Natural

Foods,

Inc.

(distributor

of

natural,

organic

and

specialty

foods)

(2013-present),

formerly

,

Allied

Capital

Corporation

(financial

services)

(2003-

2010),

SLM

Corporation

(Sallie

Mae)

(1997-2014)

and

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).

Mary

C.

Choksi

(1950)

Trustee

Since

2016

125

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-May

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

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

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1996

and

Lead

Independent

Trustee

since

2007

125

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Canadian

National

Railway

(railroad)

(2001-present),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

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

125

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:

Private

investor;

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

(May

2019-January

1,

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

125

Graham

Holdings

Company

(education

and

media

organization)

(2011-present);

and

formerly

,

The

Southern

Company

(energy

company)

(2014-May

2020;

previously

2010-2012),

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-September

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

51

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

19

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).

Robert

E.

Wade

(1946)

Trustee

Since

2007

30

El

Oro

Ltd

(investments)

(2003-

2019).

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Attorney

at

law

engaged

in

private

practice

as

a

sole

practitioner

(1972-2008)

and

member

of

various

boards.

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)

Trustee

Since

2007

136

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

39

of

the

investment

companies

in

Franklin

Templeton;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015),

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

and

Trustee

since

2013

and

Vice

President

since

1996

125

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

37

of

the

investment

companies

in

Franklin

Templeton.

Alan

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

five

of

the

investment

companies

in

Franklin

Templeton;

Chairman

of

the

Board,

Goodhart

Partners;

and

formerly

,

Chief

Executive

Officer,

Goodhart

Partners

(2009-2019).

Independent

Board

Members

(continued)

Templeton

Institutional

Funds

52

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

41

of

the

investment

companies

in

Franklin

Templeton.

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

October

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

Advisory

Services,

LLC,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

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;

Vice

President,

Franklin

Templeton

Distributors,

Inc.

and

FASA,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

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

41

of

the

investment

companies

in

Franklin

Templeton;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Robert

G.

Kubilis

(1973)

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

2017

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting

and

officer

of

39

of

the

investment

companies

in

Franklin

Templeton.

Robert

Lim

(1948)

Vice

President

–

AML

Compliance

Since

2016

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Vice

President,

Franklin

Templeton

Companies,

LLC;

Chief

Compliance

Officer,

Franklin

Templeton

Distributors,

Inc.

and

Franklin

Templeton

Investor

Services,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

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:

Associate

General

Counsel

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Templeton

Institutional

Funds

53

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

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

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

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

41

of

the

investment

companies

in

Franklin

Templeton.

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

41

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Templeton

Institutional

Funds

Shareholder

Information

54

ftinstitutional.com

Annual

Report

Proxy

Voting

Policies

and

Procedures

The

Fund’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Fund’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(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

Fund’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

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

02/21

©

2021

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

Templeton

Distributors,

Inc.

(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 $104,916 for the fiscal year ended December 31, 2020 and $156,080 for the fiscal year ended December 31, 2019.

(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 $3,133 for the fiscal year ended December 31, 202019 and $3,1333,102 for the fiscal year ended December 31, 20198. 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 $0 for the fiscal year ended December 31, 2020 and $20,000 for the fiscal year ended December 31, 2019.  The services for which these fees were paid included professional fees in connection with tax treatment of equipment lease transactions and professional fees in connection with an Indonesia withholding tax refund claim.

(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, 2020 and $1,208 for the fiscal year ended December 31, 2019.  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 $0 for the fiscal year ended December 31, 2020 and $160,144 for the fiscal year ended December 31, 2019.  The services for which these fees were paid included valuation services related to Fair Value engagement, benchmarking services in connection with the ICI TA Survey, and issuance of an Auditors' Certificate for South Korean regulatory shareholder disclosures.  

(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 $3,133 for the fiscal year ended December 31, 2020 and $184,485 for the fiscal year ended December 31, 2019.

(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.

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.

During the period covered by this report, a third-party service provider commenced performing certain accounting and administrative services for the Registrant that are subject to Franklin Templeton’s oversight.

Item 12.

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

Item 13. Exhibits.

(a)(1)

Code of Ethics

Code of Ethics

(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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

Section 302

(b)

Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

Section 906

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  _________________________

     Matthew T. Hinkle

     Chief Executive Officer – Finance and Administration

Date February 26, 2021

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  _________________________

     Matthew T. Hinkle

     Chief Executive Officer – Finance and Administration

Date February 26, 2021

By  _________________________

      Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer

Date February 26, 2021

EX-99.CODE ETH

Code of Ethics for Principal Executives

&

Senior Financial

Officers

Procedures              

Revised December 10, 2018

FRANKLIN

TEMPLETON

FUNDS

CODE OF ETHICS

FOR

PRINCIPAL

EXECUTIVES

AND

SENIOR FINANCIAL OFFICERS

I.

Covered

Officers and Purpose of the Code

Thiscode

of

ethics(the"Code")appliestothe

Principal

Executive

Officers,

Principal

Financial

Officer

andPrincipal

Accounting

Officer(the"CoveredOfficers,"eachof

whom

issetforth inExhibit

A)

ofeach investmentcompanyadvised byaFranklin

Resources

subsidiary

andthatisregisteredwiththeUnitedStates

Securities

&Exchange

Commission

(“SEC”)

(collectively,

"FTFunds")forthepurposeof

promoting:

·

Honest

andethical

conduct,

including

theethicalresolution

of

actualor

apparent

conflicts

ofinterestbetween

personal

andprofessionalrelationships;

·

Full,fair,

accurate,

timelyandunderstandabledisclosurein

reports

and

documents

thataregistrant

files

with,orsubmitsto,

the

SECandinother

public

communications

made

byoronbehalfoftheFTFunds;

·

Compliance

with

applicable

lawsandgovernmentalrulesandregulations;

·

Thepromptinternal

reporting

of

violations

oftheCode

to

an

appropriate

person

orpersons

identified

intheCode;and

·

Accountability

foradherencetotheCode.

Each

Covered

Officerwillbe

expected

toadheretoahighstandardofbusiness

ethics

andmustbe

sensitive

to

situations

that

may

giveriseto

actual

as

well

asapparentconflictsofinterest.

*

Rule 38a-1

under

the

Investment

Company

Act of 1940(“1940

Act”)

and

Rule

206(4)-7

under

the

Investment

Advisers

Act

of

1940 (“Advisers Act”)

(together

the “Compliance Rule”)

require registered

investment

companies

and

registered

investment

advisers

to,

among other

things, adopt and implement

written

policies

and

procedures reasonably

designed to

prevent

violations

of the

federal

securities

laws

(“Compliance

Rule

Policies

and

Procedures”).

CONFIDENTIAL

INFORMATION.

 

This

document

is

the

proprietary

product

ofFranklinTempleton

Investments.

It

may

NOT

be

distributed

outside

the

company

unless

it is

made subject toa

non-disclosure agreement

and/or

such

release

receives

authorization

by

an FTI

Chief Compliance

Officer.

 

Any

unauthorized

use,

reproduction

or

transfer

of this

document

is strictly

prohibited.

Franklin

Templeton

Investments

©

2014.

All

Rights Reserved.

II.

Other Policies and Procedures

ThisCodeshallbethesolecodeofethics

adopted

bytheFundsfor

purposes

of

Section

406oftheSarbanes-Oxley

Act

andtherulesandforms

applicable

to

registeredinvestmentcompanies

thereunder.

Franklin

Resources,

Inc.

has

separately

adoptedtheCodeofEthicsandBusinessConduct(“Business

Conduct”),

which

isapplicabletoallofficers,directorsandemployeesofFranklin

Resources,

Inc.,

includingCoveredOfficers.It

summarizes

thevalues,principlesandbusiness

practices

thatguidethe

employee’s

business

conduct

and

alsoprovides a set of basic

principles

toguideofficers,

directors

andemployees  regarding  theminimumethicalrequirementsexpectedofthem.Itsupplementsthevalues,

principles

andbusinessconductidentifiedintheCodeandotherexistingemployee

policies.

Additionally,theFranklinTempletonFunds

have

separatelyadoptedtheFTI

Personal

InvestmentsandInsiderTradingPolicygoverningpersonalsecurities

trading

andotherrelatedmatters.

The

CodeforInsider

Trading

provides

for

separate

requirements

thatapplytotheCoveredOfficersand

others,

and

therefore

is

not

partofthisCode.

Insofarasotherpoliciesor

procedures

of

Franklin

Resources,

Inc.,theFunds,theFunds’adviser,

principal

underwriter,orotherserviceprovidersgovernorpurporttogovernthebehaviororactivities

of

the

Covered Officers

who

are subjectto this Code, they are

superceded

bythisCodetotheextentthat

they

overlaporconflict

with

the

provisions

ofthis

Code.

Please

review these other documents or consult with

the

Legal

Department

if have questions regardingthe

applicability

ofthese

policies

toyou.

III.

Covered Officers Should Handle

Ethically

Actual and

Apparent

Conflicts ofInterest

Overview.A"conflictofinterest"occurs

when

aCoveredOfficer'sprivateinterestinterferes

with

theinterestsof,orhisorherserviceto,theFTFunds.Forexample,aconflictofinterest

would

ariseifaCoveredOfficer,ora

member

ofhis

family,

receivesimproper

personal

benefitsasaresultof

apposition

with

theFTFunds.

Certain

conflicts

of

interest

arise

out

ofthe

relationships

between

CoveredOfficersandtheFTFundsandalreadyaresubjecttoconflictof

interest

provisionsintheInvestmentCompanyActof1940("InvestmentCompanyAct")andtheInvestment

Advisers

Actof1940("Investment

Advisers

Act").Forexample,CoveredOfficers

may

notindividuallyengageincertain

transactions

(such

asthe

purchase

orsaleof

securities

or

other

property)withtheFTFunds

because

oftheirstatus

as

"affiliated

persons"of

the

FTFunds.TheFT

Funds’

andtheinvestmentadvisers’

compliance

programsandproceduresaredesignedtoprevent,oridentifyandcorrect,violationsoftheseprovisions.ThisCodedoes not,andis notintendedto,repeator replacetheseprogramsandprocedures,andsuchconflicts

fall

outside

of

theparametersofthisCode.

Althoughtypicallynot

presenting

anopportunityforimproperpersonal

benefit,

conflicts

arisefrom,orasaresultof,the

contractual

relationship

between

theFTFunds,theinvestmentadvisers

and

thefund

administrator

ofwhichtheCoveredOfficersarealso

officers

or

employees.Asaresult,

this

Code

recognizes

that

theCoveredOfficers

will,

inthe

normal

courseof

their

duties

(whether

formallyfortheFTFunds,fortheadviser,theadministrator,or

forall

three),

beinvolvedinestablishingpoliciesandimplementing

decisions

thatwillhavedifferent

effects

onthe

adviser,

administratorandtheFT

Funds.

Theparticipationof

the

CoveredOfficersinsuchactivitiesisinherentin

the

contractual

relationship

betweentheFTFunds,the

adviser,

andtheadministratorandisconsistent

with

theperformancebytheCoveredOfficersof

their

dutiesas

officers

oftheFTFunds.

Thus,

if

performed

inconformitywiththeprovisionsof

the

InvestmentCompany

Act

andtheInvestment

Advisers

Act,suchactivitieswillbedeemedtohavebeenhandled

ethically.

In

addition,

itis

recognized

by

theFTFunds'Boardsof

Directors

("Boards")thattheCoveredOfficersmayalsobeofficersoremployeesofoneormoreotherinvestmentcompanies

covered

bythisorother

codes.

Otherconflictsof

interest

arecoveredbytheCode,evenifsuch

conflicts

ofinterestarenotsubject

to

provisionsintheInvestmentCompanyActandtheInvestmentAdvisersAct.Thefollowinglistprovidesexamplesofconflictsof

interest

undertheCode,butCoveredOfficersshouldkeepinmindthattheseexamplesarenotexhaustive.Theoverarching

principle

isthatthepersonalinterestofaCoveredOfficershouldnotbe

placed

improperlybeforetheinterestoftheFTFunds.

EachCoveredOfficermust:

·

Not

usehisorher

personal

influence

or

personal

relationshipsimproperlytoinfluenceinvestment

decisions

orfinancial

reporting

bytheFTFundswherebytheCoveredOfficerwouldbenefitpersonallytothedetrimentoftheFTFunds;

·

Not

cause

the

FTFundstotake

action,

orfailtotakeaction,fortheindividual

personal

benefitof

the

CoveredOfficerratherthanthe

benefit

the

FT

Funds;

·

Not

retaliateagainstanyotherCoveredOfficerorany

employee

oftheFTFundsor

their

affiliated

persons

for

reports

of

potential

violations

thataremadeingoodfaith;

·

Report

atleastannuallythe

following

affiliations

orother

relationships:

1

o

all

directorships

forpublic

companies

andall

companies

thatare

required

tofilereportswiththeSEC;

o

anydirectorindirect

business

relationship

with

any

independentdirectorsoftheFTFunds;

o

anydirectorindirect

business

relationship

with

any

independentpublicaccounting

firm

(whicharenot

related

totheroutine

issues

related

tothe

firm’s

serviceas

the

CoveredPersonsaccountant);

and

o

anydirectorindirect

interest

inanytransactionwithanyFTFundthatwillbenefittheofficer

(not

including

benefitsderivedfromtheadvisory,sub-advisory,distributionorserviceagreementswith

affiliates

of

Franklin

Resources).

These

reports

willbereviewedbytheLegalDepartmentforcompliancewiththeCode.

Therearesomeconflictofinterestsituations

that

should

always

beapprovedinwritingbyFranklinResourcesGeneralCounselor

Deputy

GeneralCounsel,ifmaterial.Examplesofthese

include

2

:

·

Service

asadirectoron

the

boardofanypublic

or

privateCompany.

1

Reportingoftheseaffiliationsorotherrelationshipsshallbemadebycompletingtheannual

Directors

andOfficersQuestionnaireandreturningthequestionnaireto

Franklin

ResourcesInc,GeneralCounselorDeputyGeneralCounsel.

2

Anyactivityorrelationshipthat

would

presentaconflictforaCoveredOfficermayalsopresentaconflictfortheCoveredOfficer

ifamemberoftheCoveredOfficer'simmediatefamilyengagesinsuchanactivityorhassucharelationship.TheCoverPersonshouldalsoobtainwrittenapprovalbyFT’sGeneralCounselinsuchsituations.

·

Thereceiptofanygiftsinexcessof$100fromanyperson,fromanycorporationor

association.

·

Thereceiptofanyentertainmentfromany

Company

withwhichtheFTFundshascurrentor

prospective

business

dealingsunlesssuch

entertainment

is

business

related,

reasonableincost,

appropriate

astotimeandplace,andnotsofrequentastoraise

any

questionofimpropriety.Notwithstandingthe

foregoing,

theCoveredOfficersmustobtainpriorapprovalfromtheFranklin

Resources

GeneralCounselfor

any

entertainmentwithavalueinexcessof$1000.

·

Any

ownershipinterestin,oranyconsultingor

employment

relationshipwith,anyoftheFTFund’sserviceproviders,other

than

aninvestmentadviser,

principal

underwriter,administratororanyaffiliatedpersonthereof.

·

Adirectorindirect

financial

interest

incommissions,

transaction

chargesorspreads

paid

bytheFTFundsfor

effecting

portfolio

transactions

orfor

selling

or

redeeming

sharesotherthan

an

interestarisingfromtheCoveredOfficer'semployment,suchascompensationorequityownership.

·

Franklin

Resources

General

CounselorDeputyGeneralCounselwill

provide

areporttotheFTFundsAuditCommitteeofanyapprovalsgrantedat

the

next

regularlyscheduledmeeting.

IV.Disclosure and Compliance

·

Each

CoveredOfficershouldfamiliarizehimselfwiththedisclosure

requirements

generallyapplicableto

the

FTFunds;

·

Each

CoveredOfficershouldnot

knowingly

misrepresent,orcause

others

tomisrepresent,facts

about

theFT

Funds

toothers,whetherwithinor

outside

theFTFunds,

including

tothe

FT

Funds’

directors

and

auditors,

andtogovernmental

regulators

and

self-regulatory

organizations;

·

Each

CoveredOfficershould,totheextentappropriatewithinhisorherareaof

responsibility,

consultwithotherofficersandemployeesoftheFTFunds,theFTFund’sadviserandthe

administrator

withthegoalof

promoting

full,

fair,

accurate,

timelyand

understandable

disclosure

inthe

reports

and

documents

theFTFundsfile

with,

orsubmitto,theSECandinotherpubliccommunicationsmadebytheFTFunds;and

·

Itisthe

responsibility

ofeachCoveredOfficertopromotecompliancewiththe

standards

andrestrictions

imposed

by

applicable

laws,rulesandregulations.

V.

Reporting

and Accountability

EachCoveredOfficermust:

·

Upon

becomingacoveredofficer

affirm

inwritingtotheBoardthatheorshehasreceived,read,and

understands

theCode(seeExhibitB);

·

Annually

thereafter

affirm

totheBoardthathehas

complied

withtherequirementsoftheCode;and

·

Notify

Franklin

Resources’

GeneralCounselor

Deputy

GeneralCounsel

promptly

ifheorshe

knows

ofanyviolationofthis

Code.

Failuretodosoisitselfisaviolationofthis

Code.

Franklin

Resources’

General

CounselandDeputyGeneral

Counsel

areresponsibleforapplyingthisCodetospecificsituationsinwhichquestionsare

presented

underit

and

havetheauthoritytointerpretthis

Code

inanyparticular

situation.

3

However,theIndependentDirectorsofthe

respective

FTFundswill

consider

anyapprovalsorwaivers

4

soughtbyanyChiefExecutiveOfficersoftheFunds.

TheFTFundswill

follow

these

procedures

in

investigating

and

enforcingthisCode:

·

Franklin

Resources

General

CounselorDeputyGeneralCounselwill

take

all

appropriate

actionto

investigate

anypotentialviolations

reported

totheLegalDepartment;

·

If,aftersuch

investigation,

theGeneralCounsel

or

DeputyGeneralCounselbelievesthatnoviolationhasoccurred,TheGeneralCounselisnotrequiredto

take

anyfurtheraction;

·

Any

matter

thattheGeneralCounselorDeputyGeneralCounsel

believes

isa

violation

willbe

reported

tothe

Independent

Directorsofthe

appropriate

FTFund;

·

Ifthe

Independent

Directors

concur

that

aviolationhas

occurred,

itwill

inform

andmakearecommendationtotheBoardofthe

appropriate

FTFundorFunds,

which

will

consider

appropriateaction,whichmayincludereviewof,andappropriatemodificationsto, applicable

policies

and

procedures;

notification

toappropriatepersonnel

of

theinvestmentadviseroritsboard;orarecommendationtodismisstheCoveredOfficer;

·

TheIndependent

Directors

willbe

responsible

for

grantingwaivers,asappropriate;and

·

Any

changestoorwaiversofthis

Code

will,to

the

extentrequired,are

disclosed

asprovidedbySECrules.

5

VI.Other Policies and Procedures

ThisCodeshallbethesolecode

of

ethics

adopted

bytheFTFunds

for

purposesofSection406oftheSarbanes-Oxley

Act

andtherules

and

forms

applicable

toregisteredinvestmentcompaniesthereunder.Insofaras

other

policies

orproceduresoftheFTFunds,theFTFunds'advisers,principal

underwriter,

orotherserviceprovidersgovernorpurporttogovernthebehaviororactivitiesof

the

CoveredOfficerswhoaresubjecttothisCode,theyaresupersededbythisCodetotheextentthattheyoverlaporconflict

with

theprovisionsofthisCode.TheFTI

Personal

InvestmentsandInsiderTradingPolicy,adoptedbytheFTFunds,FTinvestmentadvisersandFTFund’s

principal

underwriterpursuantto

Rule

17j-1undertheInvestmentCompanyAct,theCodeof

Ethics

andBusinessConductandmoredetailed

policies

andproceduressetforth

in

FT’sEmployeeHandbookareseparaterequirementsapplyingtotheCoveredOfficersandothers,andarenotpartofthis

Code.

3

FranklinResourcesGeneralCounselandDeputyGeneralCounselareauthorizedtoconsult,asappropriate,

with

membersoftheAuditCommittee,counseltotheFTFundsandcounseltotheIndependentDirectors,andareencouragedtodoso.

4

Item2of

Form

N-CSRdefines

"waiver"

as

"the

approvalbytheregistrantofamaterialdeparturefromaprovision

of

thecodeof

ethics"and"implicit

waiver,"

which

mustalsobedisclosed,as

"the

registrant'sfailuretotakeaction

within

areasonableperiodoftime

regarding

amaterialdeparturefromaprovisionofthecodeofethicsthathas

been

madeknowntoanexecutiveofficer"

of

theregistrant.SeePartX.

5

SeePartX.

VII.

Amendments

AnyamendmentstothisCode,otherthanamendmentstoExhibitA,mustbe

approved

orratifiedbyamajorityvoteofthe

FT

Funds’

Board

including

amajorityof

independent

directors.

VIII.

Confidentiality

Allreportsandrecordspreparedor

maintained

pursuanttothis

Code

willbe

considered

confidential

andshallbe

maintained

and

protected

accordingly.

Except

asotherwiserequiredbylaw orthis Code,such mattersshallnotbe disclosedto anyoneother thanthe FTFunds’ Boardandtheir

counsel.

IX.Internal Use

TheCodeisintended

solely

fortheinternalusebytheFTFundsanddoesnot

constitute

anadmission,byoronbehalfofanyFTFunds,astoanyfact,

circumstance,

or

legal

conclusion.

X.

Disclosure

on

FormN-CSR

Item2ofFormN-CSRrequiresa

registered

managementinvestmentcompanyto

disclose

annually

whether,asofthe

end

ofthe

period

coveredbythereport,ithas

adopted

acodeofethicsthatappliestothe

registrant's

principal

executive

officer,principal

financial

officer,principal

accounting

officerorcontroller,or

persons

performing

similar

functions,

regardless

ofwhetherthese

officers

are

employedbytheregistrantorathirdparty.Iftheregistranthasnotadoptedsuchacodeofethics,itmustexplainwhyithasnotdoneso.

The

registrant

must

also:

(1)filewiththeSECacopyofthecodeasanexhibittoitsannual

report;

(2)post

the

textofthecodeon

its

Internetwebsiteand

disclose,

in

its

most

recent

report

onFormN-CSR,itsInternetaddressandthe

fact

thatit

has

postedthecodeonitsInternetwebsite;or(3)

undertake

initsmost

recent

reportonFormN-CSRtoprovidetoanyperson

without

charge,uponrequest,acopyofthecodeandexplainthemannerinwhichsuchrequestmaybemade.

Disclosure

isalso

required

ofamendmentsto,orwaivers(includingimplicitwaivers)from,aprovisionofthecodein

the

registrant's

annual

report

onFormN-CSR

oronits

website.

Ifthe

registrant

intends

tosatisfytherequirementtodisclose

amendments

andwaiversbyposting

such

information

onits

website,

itwillbe

required

todisclose

its

Internet

addressandthis

intention.

TheLegalDepartmentshallbe

responsible

for

ensuring

that:

·

acopyoftheCodeisfiledwiththeSECasanexhibittoeachFund’s

annual

report;

and

·

anyamendmentsto,orwaivers(includingimplicitwaivers)from,aprovisionoftheCodeisdisclosedinthe

registrant's

annualreportonFormN-CSR.

Intheeventthatthe

foregoing

disclosure

is

omitted

oris

determined

tobeincorrect,

the

LegalDepartmentshallpromptlyfilesuch

information

with

the

SECasanamendmenttoFormN-CSR.

Insuchan

event,

theFundChiefComplianceOfficershallreviewtheCodeandproposesuch

changes

totheCodeasare

necessary

or

appropriate

to

preventreoccurrences.

EXHIBIT

A

PersonsCoveredbytheFranklin

Templeton

FundsCodeofEthics

December2018

FRANKLIN GROUPOF FUNDS

Edward

Perks                           President

and

Chief Executive Officer

–

Investment

Management

Rupert H. Johnson, Jr.                                            Chairman

of the Board and

Vice President– Investment

Management

Don

Taylor                                                President

and

Chief Executive Officer

–

Investment

Management

Sonal

Desai)                             President

and

Chief

Executive

Officer

–

Investment

Management

Matthew Hinkle                          Chief Executive Officer

–

Finance

and Administration

Gaston R. Gardey                     Chief Financial Officer and Chief Accounting Officer and

Treasurer

FRANKLIN MUTUAL

SERIES FUNDS

Peter Langerman                       Chief Executive Officer

–

Investment Management

Matthew Hinkle                                                Chief Executive Officer

–

Finance

and Administration

Robert G. Kubilis                                                Chief Financial Officer and Chief Accounting Officer

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Mat S. Gulley                            Chief Executive Officer

–

Investment

Management

Matthew Hinkle                                                Chief Executive

Officer

–

Finance

and Administration

Robert G. Kubilis                                      Chief Financial Officer and Chief Accounting

Officer

TEMPLETON

GROUPOF FUNDS

Manraj S. Sekhon                      President and

Chief Executive Officer

–

Investment

Management

Michael

Hasenstab,

Ph.D.

President and Chief Executive Officer

–

Investment

Management

Norman

Boersma                                                   President

and

Chief Executive Officer

–

Investment

Management

Matthew Hinkle                                                Chief Executive Officer

–

Finance

and Administration

Robert G. Kubilis                       Chief Financial Officer, Chief Accounting Officer and Treasurer

Exhibit

B

ACKNOWLEDGMENT FORM

FranklinTempletonFundsCodeofEthics

ForPrincipalExecutivesandSeniorFinancialOfficers

Instructions:

1.

Complete

all

sections

ofthisform.

2.

Print

the

completed

form,sign,anddate.

3.

SubmitcompletedformtoFT’sGeneralCounselc/oCodeofEthicsAdministration

within

10daysofbecomingaCoveredOfficerandbyFebruary15

th

ofeach

subsequent

year.

Inter-officemail:

Code

ofEthics

Administration,

GlobalComplianceSM-920/2

Fax:                       

(650)312-5646

E-mail:                     

Code

ofEthics

Inquiries

&Requests(internal

address);

lpreclear@franklintempleton.com

(externaladdress)

CoveredOfficer’sName:

Title:

Department:

Location:

CertificationforYearEnding:

To:    FranklinResourcesGeneralCounsel,LegalDepartment

I

acknowledge

receiving,

reading

and

understanding

the

Franklin

Templeton

Fund’s

Code

ofEthicsfor

Principal

Executive

Officers

and

Senior

Financial

Officers

(the“Code”).I

will

complyfully

with

allprovisionsoftheCodetotheextenttheyapplyto

me

duringthe

period

of

my

employment.Ifurtherunderstandandacknowledgethatany

violation

oftheCodemaysubjectmetodisciplinaryaction,including

termination

ofemployment.

                                                                  

Signature                                                               Date signed

EX-99.CERT

I, Matthew T. Hinkle, certify that:

1. I have reviewed this report on Form N-CSR of Templeton Institutional Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

2/26/2021

S\MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

I, Robert G. Kubilis, certify that:

1. I have reviewed this report on Form N-CSR of Templeton Institutional Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

2/26/2021

S\ROBERT G. KUBILIS

Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer

EX-99.906 CERT

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew T. Hinkle, Chief Executive Officer of the Templeton Institutional Funds (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2020 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  2/26/2021

                                                S\MATTHEW T. HINKLE

                                                Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert G. Kubilis, Chief Financial Officer of the Templeton Institutional Funds (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2020 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  2/26/2021

                                                S\ROBERT G. KUBILIS

                                                Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer