o GOF P-8

                  SUPPLEMENT DATED AUGUST 25, 2004
  TO THE CURRENTLY EFFECTIVE PROSPECTUS OF EACH OF THE LISTED FUNDS

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND, INC.

FRANKLIN CALIFORNIA TAX-FREE TRUST
Franklin California Insured Tax-Free Income Fund
Franklin California Intermediate-Term Tax-Free Income Fund
Franklin California Limited-Term Tax-Free Income Fund
Franklin California Tax-Exempt Money Fund

FRANKLIN CAPITAL GROWTH FUND

FRANKLIN CUSTODIAN FUNDS, INC.
Franklin DynaTech Fund
Franklin Growth Fund
Franklin Income Fund
Franklin U.S. Government Securities Fund
Franklin Utilities Fund

FRANKLIN FEDERAL MONEY FUND

FRANKLIN FLOATING RATE TRUST

FRANKLIN GOLD & PRECIOUS METALS FUND

FRANKLIN GLOBAL TRUST
Fiduciary European Smaller Companies Fund
Fiduciary Large Capitalization Growth and Income Fund
Fiduciary Small Capitalization Equity Fund
Fiduciary Core Fixed Income Fund
Fiduciary Core Plus Fixed Income Fund
Fiduciary High Income Fund
Franklin International Smaller Companies Growth Fund

FRANKLIN HIGH INCOME TRUST
Franklin's AGE High Income Fund

FRANKLIN INVESTORS SECURITIES TRUST
Franklin Adjustable U.S. Government Securities Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Floating Rate Daily Access Fund
Franklin Short-Intermediate U.S. Government Securities Fund
Franklin Total Return Fund

FRANKLIN MANAGED TRUST
Franklin Rising Dividends Fund

FRANKLIN MONEY FUND

FRANKLIN MUNICIPAL SECURITIES TRUST
Franklin California High Yield Municipal  Fund
Franklin Tennessee Municipal Bond Fund

FRANKLIN MUTUAL SERIES FUND INC.
Mutual Beacon Fund
Mutual Discovery Fund
Mutual European Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund

FRANKLIN MUTUAL RECOVERY FUND

FRANKLIN NEW YORK TAX-FREE INCOME FUND

FRANKLIN NEW YORK TAX-FREE TRUST
Franklin New York Insured Tax-Free Income Fund
Franklin New York Intermediate-Term Tax-Free Income Fund
Franklin New York Limited-Term Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund

FRANKLIN STRATEGIC MORTGAGE PORTFOLIO

FRANKLIN TAX-EXEMPT MONEY FUND

FRANKLIN TAX-FREE TRUST
Franklin Alabama Tax-Free Income Fund
Franklin Arizona Tax-Free Income Fund
Franklin Colorado Tax-Free Income Fund
Franklin Connecticut Tax-Free Income Fund
Franklin Double Tax-Free Income Fund
Franklin Federal Intermediate-Term Tax-Free Income Fund
Franklin Federal Limited-Term Tax-Free Income Fund
Franklin Florida Insured Tax-Free Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
Franklin High Yield Tax-Free Income Fund
Franklin Insured Tax-Free Income Fund
Franklin Kentucky Tax-Free Income Fund
Franklin Louisiana Tax-Free Income Fund
Franklin Maryland Tax-Free Income Fund
Franklin Massachusetts Insured Tax-Free Income Fund
Franklin Michigan Insured Tax-Free Income Fund
Franklin Minnesota Insured Tax-Free Income Fund
Franklin Missouri Tax-Free Income Fund
Franklin New Jersey Tax-Free Income Fund
Franklin North Carolina Tax-Free Income Fund
Franklin Ohio Insured Tax-Free Income Fund
Franklin Oregon Tax-Free Income Fund
Franklin Pennsylvania Tax-Free Income Fund
Franklin Virginia Tax-Free Income Fund

FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
Franklin Templeton Conservative Target Fund
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

FRANKLIN TEMPLETON GLOBAL TRUST
Franklin Templeton Hard Currency Fund

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Templeton Foreign Smaller Companies Fund
Templeton Global Long-Short Fund

FRANKLIN TEMPLETON MONEY FUND TRUST
Franklin Templeton Money Fund

FRANKLIN VALUE INVESTORS TRUST
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund
Franklin Small Cap Value Fund

INSTITUTIONAL FIDUCIARY TRUST
Franklin Cash Reserves Fund
Franklin Structured Large Cap Core Equity Fund
Franklin Structured Large Cap Growth Equity Fund
Money Market Portfolio

TEMPLETON CHINA WORLD FUND

TEMPLETON DEVELOPING MARKETS TRUST

TEMPLETON FUNDS, INC.
Templeton Foreign Fund
Templeton World Fund

TEMPLETON GLOBAL INVESTMENT TRUST
Franklin Templeton Non-U.S. Dynamic Core Equity Fund
Templeton International (Ex EM) Fund

TEMPLETON GLOBAL OPPORTUNITIES TRUST

TEMPLETON GLOBAL SMALLER COMPANIES FUND

TEMPLETON GROWTH FUND, INC.

TEMPLETON INCOME TRUST
Templeton Global Bond Fund

TEMPLETON INSTITUTIONAL FUNDS, INC.
Emerging Fixed Income Markets Series
Emerging Markets Series
Foreign Equity Series - Primary Shares
Foreign Smaller Companies Series
Franklin Templeton Non-U.S. Core Equity Series

The prospectus is amended as follows:

I. THE FIRST AND THIRD PARAGRAPHS  UNDER THE SECTION  "MANAGEMENT" OR
"WHO MANAGES THE FUND?" ARE REPLACED WITH THE FOLLOWING:

 On February 4, 2004, the Securities Division of the Office of the Secretary of
 the Commonwealth of Massachusetts filed an administrative complaint against
 Franklin Resources, Inc. and certain of its subsidiaries (the "Company")
 claiming violations of the Massachusetts Uniform Securities Act ("Massachusetts
 Act") with respect to an alleged arrangement to permit market timing (the
 "Mass. Proceeding"). On February 17, 2004, the Company filed an Answer denying
 all violations of the Massachusetts Act. Hearings on this matter are presently
 scheduled in the coming months.

 On August 2, 2004, Franklin Resources, Inc. announced that Franklin Advisers,
 Inc. (adviser to many of the funds within Franklin Templeton Investments, and
 an affiliate of the adviser to the other funds) had reached a settlement with
 the U.S. Securities and Exchange Commission ("SEC") that resolved an SEC
 investigation of market timing activity in the Franklin Templeton Investments
 funds. As part of the settlement, on August 2, 2004, the SEC issued an "Order
 instituting administrative and cease-and-desist proceedings pursuant to
 sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and sections
 9(b) and 9(f) of the Investment Company Act of 1940, making findings and
 imposing remedial sanctions and a cease and desist order" (the "Order"). The
 SEC's Order concerns the activities of a limited number of third parties that
 ended in 2000 and those that are the subject of the Mass. Proceeding described
 above.

 Under the terms of the SEC's Order, pursuant to which Franklin Advisers,
 Inc., neither admits nor denies any wrongdoing, Franklin Advisers has agreed to
 pay $50 million, of which $20 million is a civil penalty, to be distributed to
 fund shareholders in accordance with a plan to be developed by an Independent
 Distribution Consultant ("IDC"). Because the IDC has not yet been retained and
 the distribution methodology has not yet been developed, it is presently not
 possible to say which particular funds will be determined to have been affected
 or which particular groups of fund shareholders will receive distributions or
 in what proportion and amounts.

 In the Order, the SEC notes that the Company has generally sought to detect,
 discourage and prevent market timing in its funds and began to increase its
 efforts to control market timing in 1999. The Order also requires Franklin
 Advisers to, among other things:

 o Enhance and periodically review compliance policies and procedures, and
   establish a corporate ombudsman;

 o Establish a new internal position whose responsibilities shall include
   compliance matters related to conflicts of interests; and

 o Retain an Independent Distribution Consultant to develop a plan to distribute
   the $50 million settlement to fund shareholders.

 The Staff of the SEC has also informed the Company that it is considering
 recommending a civil action or proceeding against Franklin Advisers, Inc. and
 Franklin Templeton Distributors, Inc. ("Distributors") (the principal
 underwriter of shares of the Franklin Templeton mutual funds) concerning
 payments to securities dealers who sell fund shares (commonly referred to as
 "revenue sharing"). The staff of the California Attorney General's Office also
 has advised that it is authorized to bring a  civil action against Franklin
 Resources, Inc. and Distributors arising from the same events. Even though the
 Company currently believes that the contemplated charges are unwarranted, it
 also believes that it is in the best interest of the Company and fund
 shareholders to resolve these issues voluntarily, to the extent the Company can
 reasonably do so. If it is found that the Company bears responsibility for any
 unlawful or improper conduct, the Company has committed to making the funds or
 their shareholders whole, as appropriate.

 These issues were previously disclosed by the Company as being under
 investigation by government authorities and the subject of an internal inquiry
 by the Company in its regulatory filings and on its public website. Any further
 updates on these matters will be disclosed on the Company's website at
 franklintempleton.com under "Statement on Current Industry Issues."

II. THE PARAGRAPH "RETIREMENT PLANS" UNDER THE SECTION "SALES CHARGES-CLASS B"
IS DELETED.

III. THE SECTION "DEALER COMPENSATION" IS REVISED AS FOLLOWS:

 A) FOR ALL FUNDS AND CLASSES, EXCEPT FOR ADVISOR OR Z CLASS, MONEY MARKET
 FUNDS, AND FRANKLIN FLOATING RATE TRUST, THE FIRST PARAGRAPH IS REPLACED WITH
 THE FOLLOWING:

 Qualifying dealers who sell Fund shares may receive sales commissions and other
 payments. These are paid by Franklin Templeton Distributors, Inc.
 (Distributors) from sales charges received from purchasing or redeeming
 shareholders, from distribution and service (12b-1) fees from the Fund(s) and
 from Distributors' other financial resources. Dealers may also receive
 shareholder servicing fees for servicing investors who indirectly hold Franklin
 Templeton fund shares through dealer-maintained brokerage accounts as more
 fully described under "Shareholder Servicing and Transfer Agent" in the
 Statement of Additional Information. These fees are paid by the Fund's transfer
 agent from payments it receives under its agreement with the Fund.

 B) FOR ALL FUNDS AND CLASSES, EXCEPT FOR ADVISOR OR Z CLASS, MONEY MARKET
 FUNDS, AND FRANKLIN FLOATING RATE TRUST, THE PARAGRAPH AFTER THE COMMISSION
 TABLE ENTITLED "MARKET TIMERS" OR "MARKET TIMING" IS REPLACED WITH THE
 FOLLOWING:

 If any  dealer  commissions  are paid in  connection  with a  purchase which is
 subsequently  rejected  or results  in any  trading  restriction  placed on the
 purchaser as a result of a determination by the Fund's manager or transfer
 agent that the purchase may be connected with trading activity that may be
 detrimental to the Fund as  described  in the Fund's  "Market  Timing  Trading
 Policy," the dealer shall, upon demand, refund such commissions to
 Distributors.

 C) FOR ALL FUNDS AND CLASSES, EXCEPT FOR ADVISOR OR Z CLASS AND MONEY MARKET
 FUNDS, THE FOLLOWING IS ADDED TO THE END OF THE SECTION:

 Other dealer compensation. Distributors may make payments from 12b-1 or
 distribution fees received from the Fund(s) and from its other financial
 resources, to certain dealers who have sold shares of the Franklin Templeton
 mutual funds. In the case of any one dealer, marketing support payments, with
 certain limited exceptions, will not exceed the sum of 0.10% of that dealer's
 current year's total sales of Franklin Templeton mutual funds, and 0.05% (or
 0.03%) of the average net assets of equity (or fixed income) funds attributable
 to that dealer, on an annual basis. Distributors makes these payments in
 connection with qualifying dealers' efforts to educate financial advisers about
 the Franklin Templeton funds. A number of factors will be considered in
 determining payments, including the qualifying dealer's sales, assets and
 redemption rates, and the quality of the dealer's relationship with
 Distributors. Distributors will, on an annual basis, determine the advisability
 of continuing these payments.

 To the extent permitted by SEC and NASD rules and other applicable laws and
 regulations, Distributors may pay or allow other promotional incentives or
 payments to dealers. Sale of Fund shares, as well as shares of other funds in
 Franklin Templeton Investments, is not considered a factor in the selection of
 broker-dealers to execute the Fund's portfolio transactions. Accordingly,
 the  allocation of portfolio transactions for execution by broker-dealers
 that sell Fund shares is not considered marketing support payments to such
 broker-dealers.

 You can find further details in the SAI about the payments made by Distributors
 and the services provided by your financial adviser. Your financial adviser may
 charge you additional fees or commissions other than those disclosed in this
 prospectus. You can ask your financial adviser for information about any
 payments it receives from Distributors and any services it provides, as well as
 about fees and/or commissions it charges.

IV. FOR ALL FUNDS THAT HAVE ONLINE PRIVILEGES:

 The ability to change or add a bank account online is no longer available. All
 references in the prospectus are modified accordingly.

V. FOR ALL FUNDS THAT OFFER CLASS B, CLASS C OR CLASS R SHARES:

Effective   November  1,  2004,   investors   who  do  not  have  an  investment
representative  may not  purchase  Class B,  Class C or Class R  shares.  Unless
eligible  to  purchase  Class Z or Advisor  Class  shares,  all  purchases  by a
prospective  investor  who does not have an  investment  representative  will be
placed in Class A shares or will be  returned  if we are unable to contact  such
investor.  Existing  investors who do not have an investment  representative may
not  make  additional  purchases  in their  Class  B,  Class C or Class R shares
accounts, but may exchange their shares to a Franklin Templeton Fund that offers
Class B,  Class C or Class R  shares.  Additional  purchases  by these  existing
investors  will  be  placed  in  Class  A  shares.  Dividend  and  capital  gain
distributions  may  continue to be  reinvested  in existing  Class B, Class C or
Class R shares  accounts.  These  provisions do not apply to Employer  Sponsored
Retirement Plans.

VI. FOR ALL FUNDS THAT OFFER CLASS B, CLASS C OR CLASS R SHARES, THE FIRST AND
SECOND PARAGRAPHS UNDER "YOUR ACCOUNT - SALES CHARGE REDUCTIONS AND WAIVERS -
REINSTATEMENT PRIVILEGE" ARE REPLACED WITH THE FOLLOWING:

 If you sell shares of a Franklin Templeton fund, you may reinvest some or all
 of the proceeds within 365 days of the sale without an initial sales charge.
 The proceeds must be reinvested within the same share class, except proceeds
 will be reinvested in Class A shares if the proceeds are: (1) from the sale of
 Class B shares (or Class B1 shares in Franklin Income Fund); or (2) from the
 sale of Class C or R shares held of record at the time of sale in an account
 without an identified investment representative (excepting R shares sold by an
 Employer Sponsored Retirement Plan).

 If you paid a CDSC when you sold your Class A, C or R shares, we will credit
 back to you the CDSC paid on the amount you are reinvesting within 365 days of
 the sale by adding it to the amount of your reinvestment (for example, if you
 are reinvesting $10,000 within 365 days of an earlier $10,000 sale on which you
 paid a $100 CDSC, the amount of your reinvestment will equal $10,100). The new
 shares issued with your reinvestment WILL BE subject to any otherwise
 applicable CDSC. If, however, you (excepting Employer Sponsored Retirement
 Plans) paid a CDSC when you sold (1) Class B or B1 shares; or (2) Class C or R
 shares held of record at the time of sale in an account without an identified
 investment representative and reinvest the proceeds from that sale in Class A
 shares within 365 days of the sale, you will not be credited with any CDSC paid
 at the time of sale. In this case, the new Class A shares issued with your
 reinvestment WILL NOT BE subject to any otherwise applicable CDSC.

VII. The following is added to the "Investor Services" section:

VALUED INVESTOR  PROGRAM.  You may be eligible for the Valued  Investor  Program
(VIP) if the  total  combined  value of  Franklin  Templeton  fund  shares  held
directly  with the funds in your name or the name of a legal  entity  over which
you have exclusive control, in the name of your spouse, and in the names of your
children or grandchildren who are under the age of 21 exceeds $250,000. Franklin
Templeton VIP shareholders enjoy enhanced service and transaction  capabilities.
Please contact Shareholder Services at 1-800/632-2301 for additional information
on this program.

VIII. FOR ALL FUNDS THAT OFFER ADVISOR OR Z CLASS AND FOR FRANKLIN STRUCTURED
LARGE CAP CORE EQUITY AND FRANKLIN STRUCTURED LARGE CAP GROWTH EQUITY FUNDS:

 In the "Qualified Investors" section the bullet point regarding "Officers,
 trustees, directors and full-time employees..." is added or replaced with the
 following:

 o Current and former officers, trustees, directors, full-time employees of
 Franklin Templeton Investments, and their family members. Minimum initial
 investment: $100 ($50 for accounts with an automatic investment plan) and $50
 additional.

IX. FOR THE FRANKLIN FLOATING RATE TRUST:

 The "Early Withdrawal Charge" section is modified as follows:

7. Current and former officers,  trustees,  directors and full-time employees of
the Franklin Templeton funds or Franklin Templeton Investments, and their family
members,   consistent  with  our  then-current  policies.  The  minimum  initial
investment is $100.

               Please keep this supplement for future reference.










GOF SA-6
GOF SAA-2
                    SUPPLEMENT DATED AUGUST 25, 2004
    TO THE CURRENTLY EFFECTIVE STATEMENTS OF ADDITIONAL INFORMATION
                           OF EACH OF THE LISTED FUNDS

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND, INC.

FRANKLIN CALIFORNIA TAX-FREE TRUST
Franklin California Insured Tax-Free Income Fund
Franklin California Intermediate-Term Tax-Free Income Fund
Franklin California Limited-Term Tax-Free Income Fund
Franklin California Tax-Exempt Money Fund

FRANKLIN CAPITAL GROWTH FUND

FRANKLIN CUSTODIAN FUNDS, INC.
Franklin DynaTech Fund
Franklin Growth Fund
Franklin Income Fund
Franklin U.S. Government Securities Fund
Franklin Utilities Fund

FRANKLIN FEDERAL MONEY FUND

FRANKLIN FLOATING RATE TRUST

FRANKLIN GOLD & PRECIOUS METALS FUND

FRANKLIN GLOBAL TRUST
Fiduciary European Smaller Companies Fund
Fiduciary Large Capitalization Growth and Income Fund
Fiduciary Small Capitalization Equity Fund
Fiduciary Core Fixed Income Fund
Fiduciary Core Plus Fixed Income Fund
Fiduciary High Income Fund
Franklin International Smaller Companies Growth Fund

FRANKLIN HIGH INCOME TRUST
Franklin's AGE High Income Fund

FRANKLIN INVESTORS SECURITIES TRUST
Franklin Adjustable U.S. Government Securities Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Floating Rate Daily Access Fund
Franklin Short-Intermediate U.S. Government Securities Fund
Franklin Total Return Fund

FRANKLIN MANAGED TRUST
Franklin Rising Dividends Fund

FRANKLIN MONEY FUND

FRANKLIN MUNICIPAL SECURITIES TRUST
Franklin California High Yield Municipal Fund
Franklin Tennessee Municipal Bond Fund

FRANKLIN MUTUAL SERIES FUND INC.
Mutual Beacon Fund
Mutual Discovery Fund
Mutual European Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund

FRANKLIN MUTUAL RECOVERY FUND

FRANKLIN NEW YORK TAX-FREE INCOME FUND

FRANKLIN NEW YORK TAX-FREE TRUST
Franklin New York Insured Tax-Free Income Fund
Franklin New York Intermediate-Term Tax-Free Income Fund
Franklin New York Limited-Term Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund

FRANKLIN STRATEGIC MORTGAGE PORTFOLIO

FRANKLIN TAX-EXEMPT MONEY FUND

FRANKLIN TAX-FREE TRUST
Franklin Alabama Tax-Free Income Fund
Franklin Arizona Tax-Free Income Fund
Franklin Colorado Tax-Free Income Fund
Franklin Connecticut Tax-Free Income Fund
Franklin Double Tax-Free Income Fund
Franklin Federal Intermediate-Term Tax-Free Income Fund
Franklin Federal Limited-Term Tax-Free Income Fund
Franklin Florida Insured Tax-Free Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
Franklin High Yield Tax-Free Income Fund
Franklin Insured Tax-Free Income Fund
Franklin Kentucky Tax-Free Income Fund
Franklin Louisiana Tax-Free Income Fund
Franklin Maryland Tax-Free Income Fund
Franklin Massachusetts Insured Tax-Free Income Fund
Franklin Michigan Insured Tax-Free Income Fund
Franklin Minnesota Insured Tax-Free Income Fund
Franklin Missouri Tax-Free Income Fund
Franklin New Jersey Tax-Free Income Fund
Franklin North Carolina Tax-Free Income Fund
Franklin Ohio Insured Tax-Free Income Fund
Franklin Oregon Tax-Free Income Fund
Franklin Pennsylvania Tax-Free Income Fund
Franklin Virginia Tax-Free Income Fund

FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
Franklin Templeton Conservative Target Fund
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

FRANKLIN TEMPLETON GLOBAL TRUST
Franklin Templeton Hard Currency Fund

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Templeton Foreign Smaller Companies Fund
Templeton Global Long-Short Fund

FRANKLIN TEMPLETON MONEY FUND TRUST
Franklin Templeton Money Fund

FRANKLIN VALUE INVESTORS TRUST
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund
Franklin Small Cap Value Fund

INSTITUTIONAL FIDUCIARY TRUST
Franklin Cash Reserves Fund
Franklin Structured Large Cap Core Equity Fund
Franklin Structured Large Cap Growth Equity Fund
Money Market Portfolio

TEMPLETON CHINA WORLD FUND

TEMPLETON DEVELOPING MARKETS TRUST

TEMPLETON FUNDS, INC.
Templeton Foreign Fund
Templeton World Fund

TEMPLETON GLOBAL INVESTMENT TRUST
Franklin Templeton Non-U.S. Dynamic Core Equity Fund
Templeton International (Ex EM) Fund

TEMPLETON GLOBAL OPPORTUNITIES TRUST

TEMPLETON GLOBAL SMALLER COMPANIES FUND

TEMPLETON GROWTH FUND, INC.

TEMPLETON INCOME TRUST
Templeton Global Bond Fund

TEMPLETON INSTITUTIONAL FUNDS, INC.
Emerging Fixed Income Markets Series
Emerging Markets Series
Foreign Equity Series - Primary Shares
Foreign Smaller Companies Series
Franklin Templeton Non-U.S. Core Equity Series

THE STATEMENT OF ADDITIONAL INFORMATION IS AMENDED AS FOLLOWS:

I. FOR ALL FUNDS THAT OFFER  CLASS A SHARES,  THE  SEVENTH  BULLET  POINT  UNDER
"BUYING  AND  SELLING  SHARES - INITIAL  SALES  CHARGES -  WAIVERS  FOR  CERTAIN
INVESTORS" IS REVISED AS FOLLOWS:

 o Current and former officers, trustees, directors, full-time employees of
 Franklin Templeton Investments, and their family members, consistent with our
 then-current policies

 o Current partners of law firms that currently provide legal counsel to the
 funds, Resources or its affiliates

II. THE FOLLOWING WILL BE ADDED TO THE "BUYING AND SELLING SHARES" SECTION FOR
ALL FUNDS:

Clients of financial advisors whose firms have a Selling Agreement with Franklin
Templeton  Distributors,  Inc., and who qualify as top producers may be eligible
for the Valued Investor  Program which offers  enhanced  service and transaction
capabilities.   Please  contact  Shareholder   Services  at  1-800/632-2301  for
additional information on this program.

III. THE "BUYING AND SELLING SHARES - DEALER COMPENSATION" SECTION IS AMENDED TO
READ AS FOLLOWS:

 A) FOR ALL FUNDS AND CLASSES EXCEPT ADVISOR OR Z CLASS, REPLACE THE PARAGRAPH
 THAT STARTS WITH, "IN ADDITION TO THE PAYMENTS ABOVE" WITH THE FOLLOWING:

 In addition to the sales charge payments described above and the distribution
 and service (12b-1) fees described below under "The Underwriter, Distribution
 and service (12b-1) fees," Distributors and/or its affiliates may make the
 following additional payments out of its own assets to securities dealers that
 sell shares of Franklin Templeton funds:

 B) FOR ADVISOR CLASS FUNDS, MONEY MARKET FUNDS AND THE SERIES IN TEMPLETON
 INSTITUTIONAL FUNDS, INC., REPLACE THE FIRST SENTENCE OF THE PARAGRAPH THAT
 STARTS WITH, "DISTRIBUTORS AND/OR AFFILIATES MAY PROVIDE" WITH THE FOLLOWING:

 Distributors and/or its affiliates may make the following additional payments
 out of its own assets to securities dealers that sell shares of Franklin
 Templeton funds:

 C) FOR FRANKLIN FLOATING RATE TRUST, ADD THE FOLLOWING PARAGRAPH:

 DEALER COMPENSATION Distributors and/or its affiliates may make the following
 additional payments out of its own assets to securities dealers that sell
 shares of Franklin Templeton funds:

 D) FOR ALL FUNDS, REPLACE THE REMAINDER OF THE SECTION WITH THE FOLLOWING:

 MARKETING SUPPORT PAYMENTS. Distributors may make payments to certain dealers
 who are holders or dealers of record for accounts in one or more of the
 Franklin Templeton Funds. A dealer's marketing support services may include
 business planning assistance, advertising, educating dealer personnel about the
 Franklin Templeton funds and shareholder financial planning needs, placement on
 the dealer's list of offered funds, and access to sales meetings, sales
 representatives and management representatives of the dealer. Distributors
 compensates dealers differently depending upon, among other factors, sales and
 assets levels, redemption rates and the level and/or type of marketing and
 educational activities provided by the dealer.

 Except as described below, in the case of any one dealer, marketing support
 payments, with certain limited exceptions, will not exceed the sum of 0.10% of
 that dealer's total sales of Franklin Templeton mutual funds during the
 previous year, and 0.05% or 0.03% of the average net assets, respectively, of
 equity or fixed income funds attributable to that dealer, on an annual basis.

 TRANSACTION SUPPORT PAYMENTS. The types of payments that Distributors may make
 under this category include, among others, payment of ticket charges of up to
 $20 per purchase or exchange order placed by a dealer or one time payments for
 ancillary services such as setting up funds on a dealer's mutual fund trading
 system.

 OTHER PAYMENTS. From time to time, Distributors, at its expense, may provide
 additional compensation to dealers which sell or arrange for the sale of shares
 of the Fund(s). Such compensation may include financial assistance to dealers
 that enable Distributors to participate in and/or present at conferences or
 seminars, sales or training programs for invited registered representatives and
 other employees, client and investor events and other dealer-sponsored events.
 These payments may vary depending upon the nature of the event.

 Distributors routinely sponsors due diligence meetings for registered
 representatives during which they receive updates on various Franklin Templeton
 funds and are afforded the opportunity to speak with portfolio managers.
 Invitation to these meetings is not conditioned on selling a specific number of
 shares. Those who have shown an interest in Franklin Templeton funds, however,
 are more likely to be considered. To the extent permitted by their firm's
 policies and procedures, registered representatives' expenses in attending
 these meetings may be covered by Distributors.

 Other compensation may be offered to the extent not prohibited by state laws or
 any self-regulatory agency, such as the NASD. Distributors makes payments for
 events it deems appropriate, subject to Distributors guidelines and applicable
 law.

 You can ask your dealer for information about any payments it receives from
 Distributors and any services provided.

IV. THE THIRD PARAGRAPH OF THE "SHAREHOLDER SERVICING AND TRANSFER AGENT"
SECTION IS MODIFIED AS FOLLOWS:

 Investor Services may also pay servicing fees, that will be reimbursed by the
 Fund, in varying amounts to certain financial institutions (primarily to help
 offset their costs associated with client account maintenance support,
 statement preparation and transaction processing) that (i) maintain omnibus
 accounts with the Fund in the institution's name on behalf of numerous
 beneficial owners of Fund shares who are either direct clients of the
 institution or are participants in an employer sponsored retirement plan for
 which the institution, or its affiliate, provides participant level record
 keeping services (called "Beneficial Owners"); or (ii) provide support for Fund
 shareholder accounts by sharing account data with Investor Services through the
 National Securities Clearing Corporation (NSCC) networking system. In
 addition to servicing fees received from the Fund, these financial institutions
 also may charge a fee for their services directly to their clients. Investor
 Services will also receive a fee from the Fund for services provided in support
 of Beneficial Owners and NSCC networking system accounts.

               PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE.