Edgar Filing: TEMPLETON EMERGING MARKETS FUND

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-04985
----------

TEMPLETON EMERGING MARKETS FUND
--------------------------------------
(Exact name of registrant as specified in charter)

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

MURRAY L. SIMPSON, 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
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Date of fiscal year end: 8/31
----

Date of reporting period: 8/31/04
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ITEM 1. REPORTS TO STOCKHOLDERS

AUGUST 31, 2004

[GRAPHIC OMITTED]

ANNUAL REPORT

INTERNATIONAL

TEMPLETON
EMERGING MARKETS FUND

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

Franklin o TEMPLETON o Mutual Series

Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager structure combines the specialized
expertise of three world-class investment management groups--Franklin, Templeton
and Mutual Series.

SPECIALIZED EXPERTISE

Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.

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

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

MUTUAL SERIES. Founded in 1949, Mutual Series is dedicated to a unique style of
value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.

TRUE DIVERSIFICATION

Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.

RELIABILITY YOU CAN TRUST

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

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

[GRAPHIC OMITTED]

Not part of the annual report

Contents

ANNUAL REPORT

Templeton Emerging
Markets Fund ....................... 1

Performance Summary ................ 6

Important Notice to
Shareholders ....................... 7

Financial Highlights and
Statement of Investments ........... 8

Financial Statements ............... 14

Notes to Financial
Statements ......................... 17

Report of Independent
Registered Public
Accounting Firm .................... 24

Tax Designation .................... 25

Annual Meeting of
Shareholders,
February 27, 2004 .................. 27

Dividend Reinvestment and
Cash Purchase Plan ................. 28

Board Members

and Officers ....................... 30

Shareholder Information ............ 37

Annual Report

TEMPLETON EMERGING MARKETS FUND

YOUR FUND'S GOAL AND MAIN INVESTMENTS: Templeton Emerging Markets Fund seeks
long-term capital appreciation by investing, under normal market conditions, at
least 80% of its net assets in emerging country equity securities.

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

Geographic Distribution
Based on Total Net Assets as of 8/31/04
Asia ........................................................... 55.9%
Europe ......................................................... 19.9%
Latin America .................................................. 11.8%
Middle East & Africa ........................................... 10.9%
Short-Term Investments &
Other Net Assets ............................................... 1.5%

Dear Shareholder:

We are pleased to bring you Templeton Emerging Markets Fund's annual report for
the fiscal year ended August 31, 2004.

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 9.

Annual Report | 1

PERFORMANCE OVERVIEW

For the 12 months ended August 31, 2004, Templeton Emerging Markets Fund
delivered cumulative total returns of +22.62% based on market price and +26.27%
based on net asset value. The Morgan Stanley Capital International (MSCI)
Emerging Markets (EM) Index posted a 20.50% cumulative total return for the same
period. 1 In line with our investment strategy, we are pleased with our relative
long-term results, which you will find in the Performance Summary on page 6. For
example, for the 10-year period ended August 31, 2004, the Fund delivered
cumulative total returns of +42.23% based on market price and +57.97% based on
net asset value, compared with the MSCI EM Index's -3.40% cumulative total
return for the same period. 1 Please note that index performance information is
provided for reference and that we do not attempt to track the index, but rather
undertake investments on the basis of fundamental research.

ECONOMIC AND MARKET OVERVIEW

During the first half of the reporting period, emerging markets recorded strong
performance, reflecting investors' optimism. However, concerns about a hard
landing for China's economy, high oil prices and the possibility of rising U.S.
interest rates adversely impacted investor confidence. Thus, despite the
continuation of generally positive economic and political developments, many
emerging markets lost some of their gains in the second half of the reporting
period.

The accession of 10 countries into the European Union (EU) in May 2004 expanded
the bloc to 25 countries and a cumulative population of 450 million people.
Despite some short-term political instability in the Czech Republic, Hungary and
Poland, most eastern European markets continued on an upward trend as many
governments there implemented legislation in line with EU standards and
experienced positive macroeconomic developments.

In an effort to ensure a soft economic landing, China's government implemented
credit-tightening policies and imposed investment limitations targeted at
sectors that have experienced what some consider over-investment, including
steel, property, cement and aluminum. During the past few months, signs of a
gradual cooldown became evident. As a result of their proximity to China, other
Asian markets were affected to a greater extent than their emerging markets
counterparts, and with China a major export destination for most Asian markets,
concerns about the possible repercussions of China's slowing economy led
investors to adopt a more cautious stance than earlier in the reporting period.

1. Source: Standard & Poor's Micropal. The MSCI EM Index is a free
float-adjusted, market capitalization-weighted index designed to measure equity
market performance in global emerging markets. The index is unmanaged and
includes reinvested dividends. One cannot invest directly in an index, nor is an
index representative of the Fund's portfolio. Past performance does not
guarantee future results.

2 | Annual Report

Latin American markets performed strongly during the period as some governments
focused on implementing reforms and developing regional and international trade
relations. Brazilian president Luiz Inacio Lula da Silva and Argentine president
Nestor Kirchner visited China to discuss economic ties and a free-trade
agreement with the Mercosur trade bloc (comprising Argentina, Brazil, Paraguay,
Uruguay, and associate members Bolivia, Chile and Peru).

In South Africa, the African National Congress (ANC) emerged victorious in
April's general elections, giving it a majority in parliament. In line with his
party's overwhelming victory, President Thabo Mbeki was formally re-elected for
a second term in office. The New National Party (NNP) that ruled the country
during four decades of apartheid dissolved itself due to lack of voter support.
Party members will be able to join any party they choose, with the NNP
leadership encouraging them to join the ANC. Tito Mboweni continued as the
central bank governor, a situation that many viewed as a positive sign of no
change to the country's monetary policies. South Africa's successful bid to host
soccer's 2010 World Cup has the potential to create more than 120,000 jobs and
contribute US$2.8 billion to the country's economy.

INVESTMENT STRATEGY

Our investment strategy employs a bottom-up, value-oriented, long-term approach.
We focus on the market price of a company's securities relative to our
evaluation of the company's long-term earnings, asset value and cash flow
potential. As we look for investments, we focus on specific companies and
undertake in-depth research to construct an action list from which we make our
buy decisions. Before we make a purchase, we generally look at the company's
potential for earnings and growth over a five-year horizon. During our analysis,
we also consider the company's position in its sector, the economic framework
and political environment.

MANAGER'S DISCUSSION

During the 12 months under review, the Fund's underweighted positions, relative
to the MSCI EM Index, in Taiwan and South Korea, as well as the Fund's positions
in Singapore and Austria, which are not included in the index, helped
performance. However, the Fund's underweighted position in Brazil, and our lack
of exposure to Chile, where we had no holdings due mainly to what we believed
was poor market liquidity and expensive valuations, hindered relative
performance.

Annual Report | 3

By industry, the Fund's overweighted positions in the energy, food, beverages
and tobacco sectors, as well as its underweighted position in the semiconductors
and semiconductor equipment sector, yielded the greatest contributions relative
to the MSCI EM Index during the period. The strongest individual contributors
were SK Corp. and SABMiller, as both stocks performed strongly. In addition, our
decision not to invest in YUKOS and Taiwan Semiconductor Manufacturing also
helped performance relative to the index as these stocks performed poorly during
the period. The most significant hindrance to performance was the Fund's
underweighted exposure to the materials sector where our concerns over the
sustainability of high commodity prices led us to adopt a more cautious stance
toward investing in stocks from this sector.

During the 12 months under review, we increased the Fund's holdings in Asia and
Europe, while reducing Latin American and South African exposure. Key purchases
included South Korea's Samsung Electronics, one of the world's largest
electronics manufacturers; China's China Mobile, the world's largest mobile
phone operator; Micro-Star International, one of Taiwan's largest motherboard
makers; and Resorts World, which operates the only casino in Malaysia. We
undertook selective sales as price targets were reached among our holdings in
such countries as Indonesia, Singapore and Thailand.

European investments during the period included Belgium's Interbrew, one of the
world's oldest beer companies with operations in more than 20 countries;
Telefonica, a Spanish telecommunications services provider to European and Latin
American markets; Telekomunikacja Polska, a dominant integrated
telecommunications services provider in Poland; HSBC Holdings, a U.K.-based
global banking

TOP 10 COUNTRIES
Based on Equity Investments as of 8/31/04

-------------------------------------
% OF TOTAL
NET ASSETS
-------------------------------------
South Korea 15.9%
-------------------------------------
Taiwan 12.9%
-------------------------------------
China 10.8%
-------------------------------------
South Africa 10.6%
-------------------------------------
Brazil 6.3%
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Singapore 5.8%
-------------------------------------
Mexico 5.0%
-------------------------------------
Hong Kong 4.1%
-------------------------------------
Hungary 3.1%
-------------------------------------
Poland 3.0%
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4 | Annual Report

group with significant businesses in emerging markets; and Titan Cement, one of
the two major players in the Greek cement industry. In Latin America and South
Africa, key sales included Cemex and Barloworld, respectively, as the Fund
realized gains after the regions' strong performances.

We thank you for your interest in Templeton Emerging Markets Fund and look
forward to serving your future investment needs.

Sincerely,

[PHOTO OMITTED]
/S/Mark Mobius
--------------

Mark Mobius
President and Chief Executive Officer -
Investment Management
Templeton Emerging Markets Fund

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF AUGUST 31, 2004, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR
MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.

TOP 10 HOLDINGS
8/31/04

------------------------------------------------
COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
------------------------------------------------
Anglo American PLC 3.1%
METALS & MINING, SOUTH AFRICA
------------------------------------------------
China Mobile (Hong Kong) Ltd. 2.7%
WIRELESS TELECOMMUNICATION
SERVICES, CHINA
------------------------------------------------
SABMiller PLC 2.4%
BEVERAGES, SOUTH AFRICA
------------------------------------------------
Samsung Electronics Co. Ltd. 2.3%
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT, SOUTH KOREA
------------------------------------------------
Telefonos de Mexico SA de CV (Telmex),
L, ADR 2.3%
DIVERSIFIED TELECOMMUNICATION
SERVICES, MEXICO
------------------------------------------------
Remgro Ltd. 2.1%
DIVERSIFIED FINANCIAL SERVICES,
SOUTH AFRICA
------------------------------------------------
Kimberly Clark de Mexico SA de CV, A 2.0%
HOUSEHOLD PRODUCTS, MEXICO
------------------------------------------------
Interbrew 2.0%
BEVERAGES, BELGIUM
------------------------------------------------
Taiwan Cellular Corp. 1.9%
WIRELESS TELECOMMUNICATION
SERVICES, TAIWAN
------------------------------------------------
Cia De Bebidas Das Americas (Ambev),
------------------------------------------------
ADR, pfd. 1.9%
BEVERAGES, BRAZIL
------------------------------------------------
Annual Report | 5

PERFORMANCE SUMMARY AS OF 8/31/04

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. Total return reflects the Fund's dividend income, capital gain
distributions, if any, and any unrealized gains or losses. All total returns
include reinvested distributions according to the terms specified in the Fund's
dividend reinvestment and cash purchase plan and do not reflect any sales
charges paid at inception or brokerage commissions paid on secondary market
purchases. The performance table does not reflect any taxes due on Fund
dividends, capital gain distributions, if any, or any realized gains on the sale
of Fund shares.

PRICE AND DISTRIBUTION INFORMATION

----------------------------------------------------------------------------------------------------
CHANGE 8/31/04 8/31/03
----------------------------------------------------------------------------------------------------

Net Asset Value (NAV) +$2.58 $13.40 $10.82
----------------------------------------------------------------------------------------------------
Market Price (NYSE) +$2.40 $14.24 $11.84
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DISTRIBUTIONS (9/1/03-8/31/04)
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Dividend Income $0.2319
----------------------------------------------------------------------------------------------------

PERFORMANCE

-----------------------------------------------------------------------------------------------------
1-YEAR 5-YEAR 10-YEAR
-----------------------------------------------------------------------------------------------------

Cumulative Total Return 1
-----------------------------------------------------------------------------------------------------
Based on change in NAV +26.27% +24.73% +57.97%
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Based on change in market price +22.62% +25.51% +42.23%
-----------------------------------------------------------------------------------------------------
Average Annual Total Return 1
-----------------------------------------------------------------------------------------------------
Based on change in NAV +26.27% +4.52% +4.62%
-----------------------------------------------------------------------------------------------------
Based on change in market price +22.62% +4.65% +3.59%
-----------------------------------------------------------------------------------------------------

PERFORMANCE DATA QUOTED REPRESENTS 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 MORE CURRENT PERFORMANCE, CALL FRANKLIN TEMPLETON INVESTMENTS AT
1-800/342-5236.

ENDNOTES

SPECIAL RISKS ARE ASSOCIATED WITH FOREIGN INVESTING, INCLUDING CURRENCY
VOLATILITY, ECONOMIC INSTABILITY AND SOCIAL AND POLITICAL DEVELOPMENTS OF
COUNTRIES WHERE THE FUND INVESTS. EMERGING MARKETS INVOLVE HEIGHTENED RISKS
RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THEIR
RELATIVELY SMALL SIZE AND LESSER LIQUIDITY.

1. Total return calculations represent the cumulative and average annual changes
in value of an investment over the periods indicated.

6 | Annual Report

IMPORTANT NOTICE TO SHAREHOLDERS

SHARE REPURCHASE PROGRAM

The Fund's Board previously authorized management to implement an open-market
share repurchase program pursuant to which the Fund may purchase Fund shares,
from time to time, in open-market transactions, at the discretion of management.
This authorization remains in effect.

Annual Report | 7

TEMPLETON EMERGING MARKETS FUND

FINANCIAL HIGHLIGHTS

--------------------------------------------------------
YEAR ENDED AUGUST 31,
2004 2003 2002 2001 2000
--------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)

Net asset value, beginning of year ............................... $10.82 $8.76 $8.86 $11.44 $11.60
--------------------------------------------------------
Income from investment operations:
Net investment income a ......................................... .22 .18 .15 .12 .13
Net realized and unrealized gains (losses) ...................... 2.59 2.03 (.14) (2.60) (.16)
--------------------------------------------------------
Total from investment operations ................................. 2.81 2.21 .01 (2.48) (.03)
--------------------------------------------------------
Less distributions from:
Net investment income ........................................... (.23) (.15) (.11) (.10) (.10)
Net realized gains .............................................. -- -- -- -- (.03)
--------------------------------------------------------
Total distributions .............................................. (.23) (.15) (.11) (.10) (.13)
--------------------------------------------------------
Net asset value, end of year ..................................... $13.40 $10.82 $8.76 $8.86 $11.44
--------------------------------------------------------
Market value, end of year b ...................................... $14.24 $11.84 $8.00 $8.35 $9.313
========================================================

Total return (based on market value per share) c ................. 22.62% (50.83)% (2.82)% (9.17)% (23.10)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) .................................. $236,848 $191,076 $154,640 $156,378 $201,965
Ratios to average net assets:
Expenses ........................................................ 1.63% 1.84% 1.64% 1.67% 1.68%
Net investment income ........................................... 1.70% 1.94% 1.67% 1.28% 1.09%
Portfolio turnover rate .......................................... 67.63% 48.69% 65.13% 63.64% 81.66%

aBased on average daily shares outstanding.
bBased on the last sale on the New York Stock Exchange.
cTotal return is not annualized for periods less than one year.

8 | See notes to financial statements. | Annual Report

Templeton Emerging Markets Fund

STATEMENT OF INVESTMENTS, AUGUST 31, 2004

---------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES/WARRANTS/RIGHTS VALUE
---------------------------------------------------------------------------------------------------------------------------

COMMON STOCKS 94.1%
ARGENTINA .5%
Tenaris SA, ADR ........................... Energy Equipment & Services 32,088 $ 1,236,992
---------------
AUSTRIA 2.7%
Bank Austria Creditanstalt ................ Commercial Banks 56,161 3,555,962
OMV AG .................................... Oil & Gas 12,458 2,846,064
---------------
6,402,026
---------------
BELGIUM 2.0%
Inbev ..................................... Beverages 144,250 4,622,858
---------------
BRAZIL 1.9%
Centrais Eletricas Brasileiras SA ......... Electric Utilities 67,922,000 930,946
Embraer-Empresa Brasileira
De Aeronautica SA ........................ Aerospace & Defense 312,066 1,578,950
Souza Cruz SA ............................. Tobacco 170,686 1,676,016
Unibanco Uniao de Bancos
Brasileiros SA, GDR ...................... Commercial Banks 11,200 256,480
---------------
4,442,392
---------------
CHINA 10.8%
Aluminum Corp. of China Ltd., H ........... Metals & Mining 2,520,000 1,235,777
Anhui Conch Cement Co. Ltd. ............... Construction Materials 456,000 546,619
Beijing Enterprises Holdings Ltd. ......... Industrial Conglomerates 656,711 829,313
China Mobile (Hong Kong) Ltd., ............ Wireless Telecommunication Services 2,187,500 6,380,249
China Petroleum & Chemical Corp., H ....... Oil & Gas 3,166,000 1,237,995
China Resources Enterprise Ltd. ........... Distributors 1,974,000 2,619,363
China Telecom Corp. Ltd., H ............... Diversified Telecommunication Services 2,132,000 683,338
China Travel International Investment
Hong Kong Ltd. .......................... Hotels Restaurants & Leisure 5,930,000 1,216,418
a China Travel Investment HK Ltd.,
wts., 5/31/06 ............................ Hotels Restaurants & Leisure 1,042,000 33,398
Citic Pacific Ltd. ........................ Industrial Conglomerates 1,001,192 2,554,340
Huadian Power International
Corp. Ltd., H ............................ Electric Utilities 4,004,000 1,167,841
Lenovo Group Ltd., H ...................... Computers & Peripherals 7,576,000 2,379,656
PetroChina Co. Ltd., H .................... Oil & Gas 3,018,000 1,518,683
Shanghai Industrial Holdings Ltd. ......... Industrial Conglomerates 878,000 1,615,305
TCL International Holdings Inc. ........... Household Durables 1,620,000 581,542
Tingyi (Cayman Islands) Holding Corp. ..... Food Products 754,124 157,594
Travelsky Technology Ltd., H .............. IT Services 1,241,000 883,025
---------------
25,640,456
---------------
CROATIA .7%
Pliva D D, GDR, Reg S ..................... Pharmaceuticals 121,400 1,745,732
---------------
CZECH REPUBLIC .4%
Cesky Telecom AS .......................... Diversified Telecommunication Services 70,850 892,521
---------------
GREECE 1.6%
Hellenic Telecommunications
Organization SA (OTE) .................... Diversified Telecommunication Services 146,800 1,851,859
Titan Cement Co. Construction Materials 81,620 1,993,780
---------------
3,845,639
---------------

Annual Report | 9

Templeton Emerging Markets Fund

STATEMENT OF INVESTMENTS, AUGUST 31, 2004 (CONTINUED)

COMMON STOCKS (CONT.)
HONG KONG 4.1%
Cheung Kong Holdings Ltd. ................. Real Estate 458,000 $ 3,948,807
Cheung Kong Infrastructure Holdings Ltd. .. Construction Materials 284,000 704,543
Dairy Farm International
Holdings Ltd. ............................ Food & Staples Retailing 231,100 563,884
Denway Motors Ltd. ........................ Automobiles 1,698,730 669,696
Guoco Group Ltd. .......................... Diversified Financial Services 136,000 1,150,777
Hang Lung Group Ltd. ...................... Real Estate 310,000 476,926
Henderson Investment Ltd. ................. Real Estate 906,000 1,173,161
MTR Corp. Ltd. ............................ Road & Rail 704,345 1,079,100
---------------
9,766,894
---------------
HUNGARY 3.1%
Egis RT ................................... Pharmaceuticals 17,110 763,496
Gedeon Richter Ltd. ....................... Pharmaceuticals 12,809 1,368,027
Matav RT .................................. Diversified Telecommunication Services 420,639 1,698,538
MOL Magyar Olaj-Es Gazipari RT ............ Oil & Gas 79,980 3,473,368
---------------
7,303,429
---------------
INDIA 2.9%
Gail (India) Ltd. ......................... Gas Utilities 331,410 1,320,420
Hindustan Lever Ltd. ...................... Household Products 723,300 1,747,968
Hindustan Petroleum Corp. Ltd. ............ Oil & Gas 336,823 2,289,335
Shipping Corp. of India Ltd. .............. Marine 115,041 294,398
Tata Iron & Steel Co. Ltd. ................ Metals & Mining 27,250 148,112
Tata Tea Ltd. ............................. Food Products 123,115 1,098,326
---------------
6,898,559
---------------
INDONESIA .1%
PT Perusahaan Gas Negara .................. Gas Utilities 1,505,500 184,675
PT Perusahaan Gas Negara, 144A ............ Gas Utilities 102,500 12,573
---------------
197,248
---------------
ISRAEL .3%
a Check Point Software Technologies Ltd. .... Software 45,400 796,316
---------------
MALAYSIA 2.0%
Golden Hope Plantations Bhd. .............. Food Products 80,000 73,684
Kuala Lumpur Kepong Bhd. .................. Food Products 158,600 271,289
Resorts World Bhd. ........................ Hotels Restaurants & Leisure 790,600 1,841,266
SIME Darby Bhd. ........................... Industrial Conglomerates 429,000 626,566
Southern Bank Bhd., fgn. .................. Commercial Banks 6,300 4,410
SP Setia Bhd. ............................. Real Estate 49,500 46,895
Tanjong PLC ............................... Hotels Restaurants & Leisure 80,100 263,487
YTL Corp Bhd. ............................. Electric Utilities 758,600 918,305
YTL Power International Bhd. .............. Water Utilities 1,623,200 721,897
---------------
4,767,799
---------------
MEXICO 5.0%
Fomento Economico Mexicano SA de CV
Femsa, ADR ............................... Beverages 35,970 1,554,983
Kimberly Clark de Mexico SA de CV, A ...... Household Products 1,765,200 4,852,730

10 | Annual Report

Templeton Emerging Markets Fund

STATEMENT OF INVESTMENTS, AUGUST 31, 2004 (CONTINUED)

COMMON STOCKS (CONT.)
MEXICO (CONT.)
Telefonos de Mexico SA de CV
(Telmex), L, ADR ......................... Diversified Telecommunication Services 167,262 $ 5,417,616
---------------
11,825,329
---------------
PHILIPPINES .9%
San Miguel Corp., B ....................... Beverages 1,771,090 2,175,438
---------------
POLAND 3.0%
Bank Pekao SA ............................. Commercial Banks 40,627 1,299,389
a BRE Bank SA ............................... Commercial Banks 2,271 61,460
Polski Koncern Naftowy Orlen SA ........... Oil & Gas 336,542 2,971,531
Telekomunikacja Polska SA ................. Diversified Telecommunication Services 722,400 2,853,540
---------------
7,185,920
---------------
RUSSIA 1.1%
a Avtovaz, GDR .............................. Automobiles 2,970 66,775
Lukoil Holdings, ADR ...................... Oil & Gas 20,499 2,422,982
---------------
2,489,757
---------------
SINGAPORE 5.8%
Comfortdelgro Corp. Ltd. .................. Road & Rail 1,530,000 1,125,756
Fraser & Neave Ltd. ....................... Beverages 489,367 4,000,781
Keppel Corp. Ltd. ......................... Industrial Conglomerates 885,000 3,669,304
Singapore Press Holdings Ltd. ............. Media 456,250 1,150,983
Singapore Technologies Engineering Ltd. ... Aerospace & Defense 681,000 835,119
Singapore Telecommunications Ltd. ......... Diversified Telecommunication Services 2,154,000 2,893,048
---------------
13,674,991
---------------
SOUTH AFRICA 10.6%
Anglo American PLC ........................ Metals & Mining 320,087 7,251,699
a Liberty Group Ltd. ........................ Insurance 28,000 231,362
Nampak Ltd. ............................... Containers & Packaging 88,184 185,476
Nedcor Ltd. ............................... Commercial Banks 112,048 942,844
Nedcor Ltd., 144A ......................... Commercial Banks 26,167 220,186
Old Mutual PLC ............................ Insurance 668,460 1,274,677
Remgro Ltd. ............................... Diversified Financial Services 400,639 4,875,382
SABMiller PLC ............................. Beverages 453,548 5,665,730
Sappi Ltd. ................................ Paper & Forest Products 123,000 1,731,286
Sasol Ltd. ................................ Oil & Gas 162,100 2,776,004
---------------
25,154,646
---------------
SOUTH KOREA 15.9%
CJ Corp. .................................. Food Products 41,910 2,139,435
Daewoo Shipbuilding &
Marine Engineering Co. Ltd. .............. Machinery 256,700 2,886,023
Dong-A Pharmaceutical Co. Ltd. ............ Pharmaceuticals 1,702 24,233
Hite Brewery Co. Ltd. ..................... Beverages 34,050 2,335,330
Hyundai Autonet Co. ....................... Auto Components 150,960 307,333
Hyundai Development Co. ................... Construction & Engineering 187,690 2,044,979

Annual Report | 11

Templeton Emerging Markets Fund

STATEMENT OF INVESTMENTS, AUGUST 31, 2004 (CONTINUED)

COMMON STOCKS (CONT.)
SOUTH KOREA (CONT.)
Kangwon Land Inc. ........................ Hotels Restaurants & Leisure 314,408 $ 3,439,285
Korea Electric Power Corp. ............... Electric Utilities 15,682 275,696
Korea Gas Corp. .......................... Gas Utilities 43,680 1,228,660
KT Corp. ................................. Diversified Telecommunication Services 65,310 2,066,718
LG Chem Ltd. ............................. Chemicals 67,290 2,558,755
LG Electronics Inc. ...................... Household Durables 44,250 2,112,905
LG Household & Health Care Ltd. .......... Household Products 41,230 1,034,464
LG International Corp. ................... Trading Companies & Distributors 94,560 725,711
LG Petrochemical Co. Ltd. ................ Chemicals 39,420 912,048
POSCO .................................... Metals & Mining 10,790 1,550,328
Samsung Electronics Co. Ltd. ............. Semiconductors & Semiconductor Equipment 13,930 5,454,208
Samsung Fine Chemicals Co. Ltd. .......... Chemicals 103,070 1,360,129
Samsung Heavy Industries Co. Ltd. ........ Machinery 681,820 3,001,109
SK Corp. ................................. Oil & Gas 13,590 515,591
SK Telecom Co. Ltd. ...................... Wireless Telecommunication Services 10,860 1,635,812
---------------
37,608,752
---------------
SPAIN 1.4%
Telefonica SA ............................ Diversified Telecommunication Services 231,400 3,284,663
---------------
SWEDEN .1%
a Oriflame Cosmetics, IDR .................. Personal Products 10,500 240,390
---------------
TAIWAN 12.9%
Acer Inc. ................................ Computers & Peripherals 1,438,134 1,913,851
Cheng Shin Rubber Industry Co. Ltd. ...... Auto Components 286,056 369,755
Chinatrust Financial Holding Co. Ltd. .... Commercial Banks 1,187,813 1,252,717
Chunghwa Telecom Co. Ltd. ................ Diversified Telecommunication Services 1,232,000 1,954,407
D-Link Corp. ............................. Communications Equipment 1,885,224 2,137,769
Delta Electronics Inc. ................... Electronic Equipment & Instruments 2,198,229 2,815,593
a Elan Microelectronics Corp. .............. Semiconductors & Semiconductor Equipment 1,275,000 902,688
Kinpo Electronics Inc. ................... Office Electronics 967,680 402,252
Lite-on Technology Corp. ................. Computers & Peripherals 2,173,900 2,030,847
Media Tek Inc. ........................... Semiconductors & Semiconductor Equipment 159,000 1,121,034
Mega Financial Holdings Co. Ltd. ......... Commercial Banks 3,129,661 1,893,978
Micro-Star International Co. Ltd. ........ Computers & Peripherals 1,708,300 1,370,053
Premier Image Technology Corp. ........... Leisure Equipment & Products 263,000 231,786
President Chain Store Corp. .............. Food & Staples Retailing 552,188 819,198
Princeton Technology Corp. ............... Semiconductors & Semiconductor Equipment 332,400 324,197
Siliconware Precision
Industries Co. Ltd. ..................... Semiconductors & Semiconductor Equipment 98,000 71,974
Sunplus Technology Co. Ltd. .............. Semiconductors & Semiconductor Equipment 1,240,530 1,793,011
Synnex Technology International Corp. .... Electronic Equipment & Instruments 123,200 182,773
Taiwan Cellular Corp. .................... Wireless Telecommunication Services 4,773,372 4,487,306
Tsann Kuen Enterprise Co. Ltd. ........... Household Durables 295,365 340,138
UNI-President Enterprises Corp. .......... Food Products 5,266,350 2,444,428
Yuanta Core Pacific Securities Co. ....... Capital Markets 2,556,960 1,697,629
---------------
30,557,384
---------------

12 | Annual Report

Templeton Emerging Markets Fund

STATEMENT OF INVESTMENTS, AUGUST 31, 2004 (CONTINUED)

COMMON STOCKS (CONT.)
THAILAND .5%
BEC World Public Co. Ltd., fgn. .......... Media 1,268,400 $ 560,350
Delta Electronics (Thailand) Public
Co. Ltd., fgn. .......................... Electronic Equipment & Instruments 243,400 99,347
Land and House Public Co. Ltd., fgn. ..... Household Durables 434,900 103,374
a Thai Military Bank Public Co. Ltd., fgn. . Commercial Banks 6,644,800 529,669
a True Corp. PCL, rts., 3/28/08 ............ Diversified Telecommunication Services 246,818 --
---------------
1,292,740
---------------
TURKEY 2.4%
a Arcelik AS, Br. .......................... Household Durables 455,547,650 2,378,482
Migros Turk T.A.S. ....................... Food & Staples Retailing 344,485,000 1,855,889
Tupras-Turkiye Petrol Rafineleri AS ...... Oil & Gas 178,000,000 1,373,329
---------------
5,607,700
---------------
UNITED KINGDOM 1.4%
HSBC Holdings PLC ........................ Commercial Banks 207,090 3,212,571
---------------
TOTAL COMMON STOCKS (COST $186,164,573) 222,869,142
---------------
PREFERRED STOCKS 4.4%
BRAZIL 4.4%
Banco Bradesco SA, ADR, pfd. ............. Commercial Banks 71,909 3,505,539
Cia De Bebidas Das Americas
(Ambev), ADR, pfd. ...................... Beverages 203,900 4,424,630
Cia Vale do Rio Doce, ADR, A, pfd. ....... Metals & Mining 26,400 1,285,680
Petroleo Brasileiro SA, ADR, pfd. ........ Oil & Gas 47,064 1,312,615
---------------
TOTAL PREFERRED STOCKS (COST $9,975,463) 10,528,464
---------------
SHORT TERM INVESTMENTS (COST $3,443,028) 1.5%
MONEY FUND
b Franklin Institutional Fiduciary Trust Money
Market Portfolio ........................ 3,443,028 3,443,028
---------------
TOTAL INVESTMENTS (COST $199,583,064)
100.0% .................................. 236,840,634
OTHER ASSETS, LESS LIABILITIES ........... 7,477
---------------
NET ASSETS 100.0% ........................ $ 236,848,111
===============

aNon-income producing.
bSee Note 7 regarding investments in the Franklin Institutional Fiduciary Trust
Money Market Portfolio.

Annual Report | See notes to financial statements. | 13

Templeton Emerging Markets Fund

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
August 31, 2004

Assets:
Investments in securities:
Cost - Unaffiliated issuers ............................ $ 196,140,036
Cost - Sweep money fund (Note 7) ....................... 3,443,028
=============
Value - Unaffiliated issuers ........................... 233,397,606
Value - Sweep money fund (Note 7) ...................... 3,443,028
Foreign currency, at value (cost $57,548 ) .............. 53,960
Receivables:
Investment securities sold ............................. 1,297,277
Dividends .............................................. 1,025,070
-------------
Total assets ....................................... 239,216,941
-------------
Liabilities:
Payables:
Investment securities purchased ........................ 1,915,203
Affiliates ............................................. 272,782
Other liabilities ....................................... 180,845
-------------
Total liabilities .................................. 2,368,830
-------------
Net assets, at value ............................. $ 236,848,111
=============
Net assets consist of:
Undistributed net investment income ..................... $ 709,318
Net unrealized appreciation (depreciation) .............. 37,252,772
Accumulated net realized gain (loss) .................... (6,191,915)
Capital shares .......................................... 205,077,936
-------------
Net assets, at value ..................................... $ 236,848,111
-------------
Shares outstanding ....................................... 17,680,325
-------------
Net asset value per share ................................ $13.40
=============

14 | See notes to financial statements. | Annual Report

Templeton Emerging Markets Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
For the year ended August 31, 2004

Investment income:
(net of foreign taxes of $860,519)
Dividends:

Unaffiliated issuers .................................................. $ 7,484,993
Sweep money fund (Note 7) ............................................. 54,891
Interest ............................................................... 3,459
------------
Total investment income ........................................... 7,543,343
------------
Expenses:
Management fees (Note 3) ............................................... 2,809,265
Administrative fees (Note 3) ........................................... 340,007
Transfer agent fees .................................................... 89,900
Custodian fees (Note 4) ................................................ 248,153
Reports to shareholders ................................................ 44,200
Registration and filing fees ........................................... 29,200
Professional fees ...................................................... 93,800
Trustees' fees and expenses ............................................ 34,100
Other .................................................................. 11,700
------------
Total expenses .................................................... 3,700,325
Expense reductions (Note 4) ....................................... (364)
------------
Net expenses .................................................... 3,699,961
------------
Net investment income ........................................ 3,843,382
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments (net of foreign taxes of $1,429,984) (Note 1f) ............ 35,687,643
Foreign currency transactions ......................................... (145,253)
------------
Net realized gain (loss) ........................................... 35,542,390
Net unrealized appreciation (depreciation) on:
Investments ........................................................... 9,727,744
Translation of assets and liabilities denominated in foreign currencies 2,914
Deferred taxes (Note 1f) .............................................. 466,749
------------
Net unrealized appreciation (depreciation) ......................... 10,197,407
------------
Net realized and unrealized gain (loss) ................................. 45,739,797
------------
Net increase (decrease) in net assets resulting from operations ......... $ 49,583,179
============

Annual Report | See notes to financial statements. | 15

Templeton Emerging Markets Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
For the years ended August 31, 2004 and 2003

-------------------------------
2004 2003
-------------------------------
Increase (decrease) in net assets:
Operations:

Net investment income .............................................................. $ 3,843,382 $ 3,083,598
Net realized gain (loss) from investments and foreign currency transactions ........ 35,542,390 (1,040,146)
Net unrealized appreciation (depreciation) on investments, translation of assets and
liabilities denominated in foreign currencies, and deferred taxes ................. 10,197,407 37,038,648
-------------------------------
Net increase (decrease) in net assets resulting from operations ................ 49,583,179 39,082,100
Distributions to shareholders from net investment income ............................. (4,094,975) (2,646,700)
Capital share transactions (Note 2) .................................................. 284,125 --
-------------------------------
Net increase (decrease) in net assets .......................................... 45,772,329 36,435,400
Net assets:
Beginning of year ................................................................... 191,075,782 154,640,382
-------------------------------
End of year ......................................................................... $ 236,848,111 $ 191,075,782
===============================
Undistributed net investment income included in net assets:
End of year ......................................................................... $ 709,318 $ 2,171,570
===============================

16 | See notes to financial statements. | Annual Report

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Emerging Markets Fund (the Fund) is registered under the Investment
Company Act of 1940 as a closed-end, diversified investment company. The Fund
seeks long-term capital appreciation by investing at least 80% of its net assets
in emerging country equity securities. The following summarizes the Fund's
significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange are valued at the
last reported sales price. Securities listed or traded on NASDAQ are valued at
their official closing price. Other over-the-counter securities and listed
securities for which no sale is reported are valued within the range of the
latest quoted bid and asked prices by independent pricing services or recognized
dealers in such securities. Foreign securities are valued at the close of
trading of the foreign exchange or the NYSE, whichever is earlier. If events
occur that materially affect the values of securities after the prices or
foreign exchange rates are determined, but prior to 4:00 p.m. Eastern time or
the close of trading on the NYSE, whichever is earlier, or if market quotations
are deemed not readily available or reliable, the securities will be valued at
fair value. Investments in open-end mutual funds are valued at the closing net
asset value. All security valuation procedures are approved by the Board of
Trustees.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date.

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

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

C. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an

Annual Report | 17

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. FOREIGN CURRENCY CONTRACTS (CONTINUED)

agreed upon exchange rate on a specified date. Realized and unrealized gains and
losses are included in the Statement of Operations.

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

D. INCOME TAXES

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

E. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available. Interest income and estimated expenses are accrued daily. Dividend
income and distributions to shareholders are recorded on the ex-dividend date.

F. DEFERRED TAXES

The Fund is subject to a tax imposed on net realized gains of securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities as reflected in the accompanying
financial statements.

G. ACCOUNTING ESTIMATES

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

H. GUARANTEES AND INDEMNIFICATIONS

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

18 | Annual Report

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST

The Board of the Fund previously authorized an open-market share repurchase
program pursuant to which the Fund may purchase, from time to time, Fund shares
in open-market transactions, at the discretion of management. This authorization
remains in effect.

At August 31, 2004, there were an unlimited number of shares authorized (without
par value). During the year ended August 31, 2004, 23,888 shares were issued for
$284,125 from reinvested distributions. During the year ended August 31, 2003,
there were no share transactions; all reinvested distributions were satisfied
with previously issued shares purchased in the open market.

3. TRANSACTIONS WITH AFFILIATES

Certain officers of the Fund are also officers or trustees of the following
entities:

--------------------------------------------------------------------------------
ENTITY AFFILIATION
--------------------------------------------------------------------------------
Templeton Asset Management Ltd. (TAML) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager

A. MANAGEMENT FEES

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

------------------------------------------------------------------------------
ANNUALIZED FEE RATE NET ASSETS
------------------------------------------------------------------------------
1.250% First $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% Over $20 billion

Prior to June 1, 2004, the Fund paid an investment management fee to TAML of
1.25% per year of the daily net assets of the Fund.

B. ADMINISTRATIVE FEES

The Fund pays an administrative fee to FT Services of 0.15% per year based on
the Fund's average daily net assets.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the year ended August 31, 2004, the
custodian fees were reduced as noted in the Statement of Operations.

Annual Report | 19

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES

At August 31, 2004, the Fund had tax basis capital losses of $5,657,930 which
may be carried over to offset future capital gains. Such losses expire in 2011.

At August 31, 2004, the Fund had deferred currency losses occurring subsequent
to October 31, 2003 of $113,002. For tax purposes, such losses will be reflected
in the year ending August 31, 2005.

At August 31, 2004, the cost of investments, net unrealized appreciation
(depreciation), and undistributed ordinary income based on the cost of
investments for income tax purposes were as follows:

Cost of investments ...................................... $ 202,558,334
-------------
Unrealized appreciation .................................. $ 41,225,486
Unrealized depreciation .................................. (6,943,186)
-------------
Net unrealized appreciation (depreciation) ............... $ 34,282,300
=============

Distributable earnings - ordinary income ................. $ 3,263,604
=============

The tax character of distributions paid during the years ended August 31, 2004
and 2003 was as follows:

----------------------------
2004 2003
----------------------------
Distributions paid from:
Ordinary income ........................... $4,094,975 $2,646,700

Net investment income (loss) differs for financial statement and tax purposes
primarily due to differing treatments of foreign currency transactions and
passive foreign investment company shares.

Net realized gains differ for financial statement and tax purposes primarily due
to differing treatment of wash sales, foreign currency transactions, passive
foreign investment company shares and foreign taxes on sales of securities.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term securities) for the
year ended August 31, 2004 aggregated $147,067,799 and $149,506,925,
respectively.

7. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (the Sweep Money Fund), an open-end investment company managed by
Franklin Advisers, Inc. (an affiliate of the investment manager). Management
fees paid by the Fund are reduced on assets invested in the Sweep Money Fund, in
an amount not to exceed the management fees paid by the Sweep Money Fund.

20 | Annual Report

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. REGULATORY MATTERS

MASSACHUSETTS ADMINISTRATIVE PROCEEDING

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

Under the terms of the settlement consent order issued by the State of
Massachusetts, Franklin Advisers and FTAS have consented to the entry of a
cease-and-desist order and agreed to pay a $5 million administrative fine to the
State of Massachusetts. The consent order has multiple sections, including
"Statements of Fact" and "Violations of Massachusetts Securities Laws." The
Company admitted the "Statements of Fact." The Company did not admit or deny the
"Violations of the Massachusetts Securities Laws." While Franklin Advisers and
FTAS did not admit or deny engaging in any wrongdoing, the Company believes that
it is in its best interest and the interests of its funds' shareholders to
settle this issue now and move forward.

U.S. SECURITIES AND EXCHANGE COMMISSION (SEC) SETTLEMENT

On August 2, 2004, the Company announced that an agreement has been reached by
Franklin Advisers with the SEC that resolves the issues resulting from the SEC's
investigation of market timing activity and 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 Massachusetts administrative complaint described
above.

Under the terms of the SEC's Order, pursuant to which Franklin Advisers 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
shareholders of certain funds in accordance with a plan to be developed by an
Independent Distribution Consultant. At this time, it is unclear which funds
will receive distributions or which shareholders of any particular fund will
receive distributions. The SEC Order also requires Franklin Advisers to, among
other things, enhance and periodically review compliance policies and
procedures.

Annual Report | 21

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

OTHER GOVERNMENTAL INVESTIGATIONS

As part of ongoing investigations by the SEC, the U.S. Attorney for the Northern
District of California, the New York Attorney General, the California Attorney
General, the U.S. Attorney for the District of Massachusetts, the Florida
Department of Financial Services and the Commissioner of Securities, the West
Virginia Attorney General, the Vermont Department of Banking, Insurance,
Securities, and Health Care Administration and the National Association of
Securities Dealers, relating to certain practices in the mutual fund industry,
including late trading, market timing and payments to securities dealers who
sell fund shares, the Company and its subsidiaries, as well as certain current
or former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees have been providing documents and information in response
to these requests and subpoenas. In addition, the Company has responded to
requests for similar kinds of information from regulatory authorities in some of
the foreign countries where the Company conducts its global asset management
business.

The staff of the SEC has also informed the Company that it is considering
recommending a civil action or proceeding against Franklin Advisers and Franklin
Templeton Distributors, Inc. ("FTDI") concerning payments to securities dealers
who sell fund shares (commonly referred to as "revenue sharing"). The staff of
the California Attorney General's Office ("CAGO") also has advised the Company
that the California Attorney General is authorized to bring a civil action
against the Company and FTDI arising from the same events. Even though the
Company currently believes that the charges the SEC staff and CAGO staff are
contemplating are unwarranted, it also believes that it is in the best interest
of the Company's and funds' shareholders to resolve these issues voluntarily, to
the extent the Company can reasonably do so. The Company continues to have
discussions towards resolving these governmental investigations.

OTHER LEGAL PROCEEDINGS

The Company, in addition to other entities within Franklin Templeton
Investments, including certain of its subsidiaries, other funds, and current and
former officers, employees, and directors have been named in multiple lawsuits
in different federal courts in Nevada, California, Illinois, New York and
Florida, alleging violations of various federal securities laws and seeking,
among other things, monetary damages and costs. Specifically, the lawsuits claim
breach of duty with respect to alleged arrangements to permit market timing
and/or late trading activity, or breach of duty with respect to the valuation of
the portfolio securities of certain funds managed by Company subsidiaries,
resulting in alleged market timing activity. The majority of these lawsuits
duplicate, in whole or in part, the allegations asserted in the Massachusetts
administrative complaint described above. The lawsuits are styled as class
actions or derivative actions on behalf of either the named funds or the
Company.

22 | Annual Report

Templeton Emerging Markets Fund

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

OTHER LEGAL PROCEEDINGS (CONTINUED)

Various subsidiaries of the Company have also been named in multiple lawsuits
filed in state courts in Illinois alleging breach of duty with respect to
valuation of the portfolio securities of certain funds managed by such
subsidiaries.

In addition, the Company and certain of its subsidiaries, as well as certain
current and former officers, employees, and directors have been named in
multiple lawsuits alleging violations of various securities laws and pendent
state law claims relating to the disclosure of directed brokerage payments
and/or payment of allegedly excessive advisory, commission, and distribution
fees. These lawsuits are styled as class actions and derivative actions brought
on behalf of certain funds.

The Company's management strongly believes that the claims made in each of these
lawsuits are without merit and intends to vigorously defend against them.

The Company cannot predict with certainty the eventual outcome of the foregoing
governmental investigations or class actions or other lawsuits. If the Company
finds that it bears responsibility for any unlawful or inappropriate conduct
that caused losses to the Fund, it is committed to making the Fund or its
shareholders whole, as appropriate.

Annual Report | 23

Templeton Emerging Markets Fund

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF TEMPLETON EMERGING MARKETS FUND

In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Templeton Emerging Markets Fund
(the "Fund") at August 31, 2004, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities August 31,
2004 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California
October 13, 2004

24 | Annual Report

Templeton Emerging Markets Fund

TAX DESIGNATION (UNAUDITED)

Under Section 854(b)(2) of the Internal Revenue Code (Code), the Fund hereby
designates up to a maximum of $4,069,210 as qualified dividends for purposes of
the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended
August 31, 2004. In January 2005, shareholders will receive Form 1099-DIV which
will include their share of qualified dividends distributed during the calendar
year 2004. Shareholders are advised to check with their tax advisors for
information on the treatment of these amounts on their individual income tax
returns.

At August 31, 2004, more than 50% of the Templeton Emerging Markets Fund total
assets were invested in securities of foreign issuers. In most instances,
foreign taxes were withheld from dividends paid to the Fund on these
investments. As shown in the table below, the Fund hereby designates to
shareholders the foreign source income and foreign taxes paid, pursuant to
Section 853 of the Code. This designation will allow shareholders of record on
November 5, 2004, to treat their proportionate share of foreign taxes paid by
the Fund as having been paid directly by them. The shareholder shall consider
these amounts as foreign taxes paid in the tax year in which they receive the
Fund distribution.

The following table provides a detailed analysis, by country, of foreign tax
paid, foreign source income, foreign qualified dividends, and adjusted foreign
source income as designated by the Fund, to shareholders of record. As a service
to individual shareholders filing Form 1116, "Adjusted Foreign Source Income per
Share" in column 4 below reports foreign source income with the required
adjustments to foreign source qualified dividends. This information is provided
to simplify your reporting of foreign source income for line 1 of Form 1116.

---------------------------------------------------------------------------------------------------------------
ADJUSTED
FOREIGN TAX FOREIGN FOREIGN FOREIGN
PAID SOURCE INCOME QUALIFIED DIVIDENDS SOURCE INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE
---------------------------------------------------------------------------------------------------------------

Austria ................................... 0.0010 0.0038 0.0038 0.0016
Belgium ................................... 0.0003 0.0012 0.0012 0.0005
Bermuda ................................... 0.0000 0.0001 0.0000 0.0001
Brazil .................................... 0.0055 0.0257 0.0090 0.0206
China ..................................... 0.0000 0.0093 0.0060 0.0059
Croatia ................................... 0.0000 0.0021 0.0000 0.0021
Czech Republic ............................ 0.0004 0.0015 0.0015 0.0006
Egypt ..................................... 0.0000 0.0011 0.0011 0.0005
Greece .................................... 0.0000 0.0077 0.0077 0.0033
Hong Kong ................................. 0.0000 0.0210 0.0000 0.0210
Hungary ................................... 0.0017 0.0063 0.0063 0.0027
India ..................................... 0.0803 0.0096 0.0090 0.0045
Indonesia ................................. 0.0002 0.0007 0.0007 0.0003
Luxembourg ................................ 0.0000 0.0014 0.0014 0.0006
Malaysia .................................. 0.0014 0.0030 0.0000 0.0030
Mexico .................................... 0.0000 0.0153 0.0146 0.0070
Philippines ............................... 0.0006 0.0014 0.0014 0.0006
Poland .................................... 0.0007 0.0025 0.0025 0.0011
Russia .................................... 0.0006 0.0032 0.0030 0.0015
Singapore ................................. 0.0070 0.0325 0.0000 0.0325
South Africa .............................. 0.0022 0.0314 0.0224 0.0186
South Korea ............................... 0.0098 0.0331 0.0304 0.0157
Spain ..................................... 0.0003 0.0012 0.0012 0.0005
Switzerland ............................... 0.0000 0.0001 0.0000 0.0001
Taiwan .................................... 0.0169 0.0433 0.0000 0.0433
Thailand .................................. 0.0002 0.0041 0.0040 0.0018
Turkey .................................... 0.0000 0.0007 0.0007 0.0003
United Kingdom ............................ 0.0002 0.0009 0.0009 0.0004
-----------------------------------------------------------
TOTAL ..................................... $0.1293 $0.2642 $0.1288 $0.1907
-----------------------------------------------------------

Annual Report | 25

Templeton Emerging Markets Fund

TAX DESIGNATION (UNAUDITED) (CONTINUED)

Foreign Tax Paid per Share (Column 1) is the amount per share available to you,
as a tax credit or deduction (assuming you held your shares in the Fund for a
minimum of 16 days during the 30-day period beginning 15 days before the
ex-dividend date of the Fund's distribution to which the foreign taxes relate).

Foreign Source Income per Share (Column 2) is the amount per share of income
dividends paid to you that is attributable to foreign securities held by the
Fund, plus any foreign taxes withheld on these dividends. The amounts reported
include foreign source qualified dividends without adjustment for the lower U.S.
tax rates. Generally, this is the foreign source income to be reported by
certain trusts and corporate shareholders.

Foreign Qualified Dividends per Share (Column 3) is the amount per share of
foreign source qualified dividends the Fund paid to you, plus any foreign taxes
withheld on these dividends. These amounts represent the portion of the Foreign
Source Income reported to you in column 2 that were derived from qualified
foreign securities held by the Fund. If you are an individual shareholder who
does not meet the qualified dividend holding period requirements, you may find
this information helpful to calculate the foreign source income adjustment
needed to complete line 1 of Form 1116.

Adjusted Foreign Source Income per Share (Column 4) is the adjusted amount per
share of foreign source income the Fund paid to you. These amounts reflect the
Foreign Source Income reported in column 2 adjusted for the tax rate
differential on foreign source qualified dividends that may be required for
certain individual shareholders pursuant to Internal Revenue Code 904(b)(2)(B).
If you are an individual shareholder who meets the qualified dividend holding
period requirements, generally, these Adjusted Foreign Source Income amounts may
be reported directly on line 1 of Form 1116 without additional adjustment.

In January 2005, shareholders will receive Form 1099-DIV which will include
their share of taxes paid and foreign source income distributed during the
calendar year 2004. The Foreign Source Income reported on Form 1099-DIV has been
reduced to take into account the tax rate differential on foreign source
qualified dividend income pursuant to the Code 904(b)(2)(B). Shareholders are
advised to check with their tax advisors for information on the treatment of
these amounts on their 2004 individual income tax returns.

26 | Annual Report

Templeton Emerging Markets Fund

ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 27, 2004

The Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 E. Broward Boulevard, Fort Lauderdale, Florida, on February 27, 2004. The
purpose of the meeting was to elect four Trustees of the Fund. At the meeting,
the following persons were elected by the shareholders to serve as Trustees of
the Fund: Harmon E. Burns, Charles B. Johnson, Frank A. Olson and Constantine D.
Tseretopoulos.* No other business was transacted at the meeting.

The results of the voting at the Annual Meeting are as follows:

The election of four (4) Trustees:

---------------------------------------------------------------------------------------------------------
% OF % OF % OF % OF
OUTSTANDING VOTED OUTSTANDING VOTED
TERM EXPIRING 2007: FOR SHARES SHARES WITHHELD SHARES SHARES
---------------------------------------------------------------------------------------------------------

Harmon E. Burns ......... 14,832,116.3195 83.90% 98.42% 237,597.6964 1.34% 1.58%
Charles B. Johnson ...... 14,819,267.3195 83.82% 98.34% 250,446.6964 1.42% 1.66%
Frank A. Olson .......... 14,817,969.3195 83.82% 98.33% 251,744.6964 1.42% 1.67%
Constantine D.
Tseretopoulos ............. 14,837,488.3195 83.93% 98.46% 232,225.6964 1.31% 1.54%

* Harris J. Ashton, Nicholas F. Brady, Frank J. Crothers, S. Joseph Fortunato,
Edith E. Holiday, Gordon S. Macklin and Fred R. Millsaps are Trustees of the
Fund who are currently serving and whose terms of office continued after the
Annual Meeting of Shareholders.

Annual Report | 27

Templeton Emerging Markets Fund

DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the "Plan") with
the following features:

Shareholders must affirmatively elect to participate in the Plan; share
dividends and capital gains distributions will be reinvested automatically;
Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938, will
provide additional Plan information upon request.

Whenever the Fund declares dividends in either cash or shares of the Fund, if
the market price is equal to or exceeds net asset value at the valuation date,
the participant will receive the dividends entirely in shares at a price equal
to the net asset value, but not less than 95% of the then current market price
of the Fund's shares. If the market price is lower than net asset value or if
dividends and/or capital gains distributions are payable only in cash, the
participant will receive shares purchased on the New York Stock Exchange or
otherwise on the open market.

A participant has the option of submitting additional cash payments to Mellon
Bank, N.A. (the "Plan Administrator"), in any amounts of at least $100, up to a
maximum of $5,000 per month, for the purchase of Fund shares for his or her
account. These payments shall be made by check or money order payable to "Mellon
Bank, N.A." and sent to Mellon Investor Services, P.O. Box 382009, Pittsburgh,
PA 15250-8009, Attention: Templeton Emerging Markets Fund. The Plan
Administrator shall apply such payments (less a $5.00 service charge and less a
pro rata share of trading fees) to purchases of Fund shares on the open market.

The automatic reinvestment of dividends and/or capital gains does not relieve
the participant of any income tax that may be payable on dividends or
distributions.

Whenever shares are purchased on the New York Stock Exchange or otherwise on the
open market, each participant will pay a pro rata portion of trading fees.
Trading fees will be deducted from amounts to be invested. The Plan Agent's fee
for a sale of shares through the Plan are $15.00 per transaction plus a $0.12
per share trading fee.

The participant may withdraw from the Plan without penalty at any time by
written notice to the Plan Administrator sent to Mellon Investor Services, P.O.
Box 3338, South Hackensack, NJ 07606-1938. Upon withdrawal, the participant will
receive, without charge, share certificates issued in the participant's name for
all full shares held by the Plan Administrator; or, if the participant wishes,
the Plan Administrator will sell the shares and send the proceeds to the
participant, less a service charge of $15.00 and less trading fees of $0.12 per
share.

28 | Annual Report

Templeton Emerging Markets Fund

TRANSFER AGENT
Mellon Investor Services LLC
85 Challenger Road
Ridgefield Park, NJ 07660
1-800-416-5585
www.melloninvestor.com

SHAREHOLDER INFORMATION

Shares of Templeton Emerging Markets Fund are traded on the New York Stock
Exchange under the symbol "EMF." The Fund's shares are also listed and traded on
the Pacific Exchange. Information about the net asset value and the market price
is published each Monday in the WALL STREET JOURNAL, weekly in BARRON'S and each
Saturday in THE NEW YORK TIMES and other newspapers. Daily market prices for the
Fund's shares are published in the "New York Stock Exchange Composite
Transactions" section of newspapers.

For current information about dividends and shareholder accounts, call
1-800-416-5585. Registered shareholders can access their Fund account on-line
with Investor ServiceDirect(R). For information go to Mellon Investor Services'
web site at https://vault.melloninvestor.com/isd and follow the instructions.

The daily closing net asset value as of the previous business day may be
obtained when available by calling Franklin Templeton Fund Information after 7
a.m. Pacific time any business day at 1-800/DIAL BEN(R) (1-800/342-5236). The
Fund's net asset value and dividends are also listed on the NASDAQ Stock Market,
Inc.'s Mutual Fund Quotation Service ("NASDAQ MFQS").

Shareholders not receiving copies of reports to shareholders because their
shares are registered in the name of a broker or a custodian can request that
they be added to the Fund's mailing list, by writing Templeton Emerging Markets
Fund, 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, FL 33733-8030.

Annual Report | 29

Board Members and Officers

The name, age and address of the officers and board members, as well as their
affiliations, positions held with the Fund, principal occupations during the
past five years and number of U.S. registered portfolios overseen in the
Franklin Templeton Investments fund complex are shown below. Each board member
will serve until that person's successor is elected and qualified.

INDEPENDENT BOARD MEMBERS

-------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
-------------------------------------------------------------------------------------------------------------------------------

HARRIS J. ASHTON (72) Trustee Since 1992 140 Director, Bar-S Foods (meat
500 East Broward Blvd. packing company).
Suite 2100
Fort Lauderdale, FL 33394-3091
-------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING 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).
-------------------------------------------------------------------------------------------------------------------------------
FRANK J. CROTHERS (60) Trustee Since 1999 21 None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091
-------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman, Island Corporate Holdings Ltd. (Vice Chairman 1996-2003); Vice Chairman, Caribbean Utilities Co. Ltd.;
Director and President, Provo Power Company Ltd.; Director, Caribbean Electric Utility Services Corporation (Chairman
until 2002); director of various other business and nonprofit organizations; and FORMERLY, Chairman, Atlantic Equipment
& Power Ltd. (1977-2003).
-------------------------------------------------------------------------------------------------------------------------------
S. JOSEPH FORTUNATO (72) Trustee Since 1992 141 None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091
-------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Attorney; and FORMERLY, member of the law firm of Pitney, Hardin, Kipp & Szuch.
-------------------------------------------------------------------------------------------------------------------------------
EDITH E. HOLIDAY (52) Trustee Since 1996 96 Director, Amerada Hess
500 East Broward Blvd. Corporation (exploration and
Suite 2100 refining of oil and gas); H.J.
Fort Lauderdale, FL 33394-3091 Heinz Company (processed foods
and allied products); RTI
International Metals, Inc.
(manufacture and distribution
of titanium); and Canadian
National Railway (railroad).
-------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING 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).
-------------------------------------------------------------------------------------------------------------------------------

30 | Annual Report

--------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
--------------------------------------------------------------------------------------------------------------------------

GORDON S. MACKLIN (76) Trustee Since 1993 140 Director, White Mountains
500 East Broward Blvd. Insurance Group, Ltd.
Suite 2100 (holding company); Martek
Fort Lauderdale, FL 33394-3091 Biosciences Corporation;
MedImmune, Inc.
(biotechnology); and
Overstock.com (Internet
services); and FORMERLY,
Director, MCI
Communication Corporation
(subsequently known as MCI
WorldCom, Inc. and
WorldCom, Inc.)
(communications services)
(1988-2002) and Spacehab,
Inc. (aerospace services)
(1994-2003).
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Deputy Chairman, White Mountains Insurance Group, Ltd. (holding company); and FORMERLY, Chairman, White River Corporation
(financial services) (1993-1998) and Hambrecht & Quist Group (investment banking) (1987-1992); and President, National
Association of Securities Dealers, Inc. (1970-1987).
--------------------------------------------------------------------------------------------------------------------------
FRED R. MILLSAPS (75) Trustee Since 1990 28 None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director of various business and nonprofit organizations; manager of personal investments (1978-present); and FORMERLY,
Chairman and Chief Executive Officer, Landmark Banking Corporation (1969-1978); Financial Vice President, Florida Power and
Light (1965-1969); and Vice President, Federal Reserve Bank of Atlanta (1958-1965).
--------------------------------------------------------------------------------------------------------------------------
FRANK A. OLSON (72) Trustee Since 2003 21 Director, Becton,
500 East Broward Blvd. Dickinson and Co. (medical
Suite 2100 technology); White
Fort Lauderdale, FL 33394-3091 Mountains Insurance Group
Ltd. (holding company);
and Amerada Hess
Corporation (exploration
and refining of oil and
gas).
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman of the Board, The Hertz Corporation (car rental) (since 1980) (Chief Executive Officer 1977-1999); and FORMERLY,
Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines).
--------------------------------------------------------------------------------------------------------------------------
CONSTANTINE D. TSERETOPOULOS (50) Trustee Since 1999 21 None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Physician, 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).
--------------------------------------------------------------------------------------------------------------------------

Annual Report | 31

INTERESTED BOARD MEMBERS AND OFFICERS

**NICHOLAS F. BRADY (74) Trustee Since 1993 21 Director, Amerada Hess
500 East Broward Blvd. Corporation (exploration
Suite 2100 and refining of oil and
Fort Lauderdale, FL 33394-3091 gas); and C2, Inc.
(operating and investment
business); and FORMERLY,
Director, H.J. Heinz
Company (processed foods
and allied
products)(1987-1988;
1993-2003).
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman, Darby Overseas Investments, Ltd., Darby Emerging Markets Investments LDC and Darby Technology Ventures Group,
LLC (investment firms) (1994-present); Director, Templeton Capital Advisors Ltd. and Franklin Templeton Investment
Fund; and FORMERLY, Chairman, Templeton Emerging Markets Investment Trust PLC (until 2003), Secretary of the United
States Department of the Treasury (1988-1993); Chairman of the Board, Dillon, Read & Co., Inc. (investment banking)
(until 1988); and U.S. Senator, New Jersey (April 1982-December 1982).
--------------------------------------------------------------------------------------------------------------------------
HARMON E. BURNS (59) Trustee and Trustee since 36 None
One Franklin Parkway Vice President 1992 and
San Mateo, CA 94403-1906 Vice President
since 1996
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice President and Director,
Franklin Templeton Distributors, Inc.; Executive Vice President, Franklin Advisers, Inc.; Director, Franklin Investment
Advisory Services, 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 49 of the investment companies in Franklin Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
**CHARLES B. JOHNSON (71) Trustee, Trustee and 140 None
One Franklin Parkway Chairman of Chairman of the
San Mateo, CA 94403-1906 the Board and Board since 1995
Vice President and Vice
President since
1992
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman of the Board, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice President, Franklin
Templeton Distributors, Inc.; Director, Fiduciary Trust Company International; and officer and/or director or trustee, as the
case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 46 of the investment companies in Franklin
Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
JAMES M. DAVIS (52) Chief Since July 2004 Not Applicable None
One Franklin Parkway Compliance
San Mateo, CA 94403-1906 Officer
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Officer of 51 of the investment companies in Franklin Templeton Investments; Director, Global Compliance, Franklin
Resources, Inc.; and FORMERLY, Director of Compliance, Franklin Resources, Inc. (1994-2001).
--------------------------------------------------------------------------------------------------------------------------

32 | Annual Report

JEFFREY A. EVERETT (40) Vice President Since 2001 Not Applicable None
PO Box N-7759
Lyford Cay, Nassau, Bahamas
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President and Director, Templeton Global Advisors Limited; officer of 15 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Investment Officer, First Pennsylvania Investment Research (until 1989).
--------------------------------------------------------------------------------------------------------------------------
MARTIN L. FLANAGAN (44) Vice President Since 1989 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Co-President and Chief Executive Officer, Franklin Resources, Inc.; Senior Vice President and Chief Financial Officer,
Franklin Mutual Advisers, LLC; Executive Vice President, Chief Financial Officer and Director, Templeton Worldwide, Inc.;
Executive Vice President and Chief Operating Officer, Templeton Investment Counsel, LLC; President and Director, Franklin
Advisers, Inc.; Executive Vice President, Franklin Investment Advisory Services, Inc. and Franklin Templeton Investor
Services, LLC; Chief Financial Officer, Franklin Advisory Services, LLC; Chairman, Franklin Templeton Services, LLC; and
officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of
49 of the investment companies in Franklin Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
JIMMY D. GAMBILL (57) Senior Vice Since 2002 Not Applicable None
500 East Broward Blvd. President and
Suite 2100 Chief
Fort Lauderdale, FL 33394-3091 Executive
Officer -
Finance and
Administration
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Templeton Services, LLC; Senior Vice President, Templeton Worldwide, Inc.; and officer of 51 of the
investment companies in Franklin Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
DAVID P. GOSS (57) Vice President Since 2000 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Associate General Counsel, Franklin Resources, Inc.; officer and director of one of the subsidiaries of Franklin Resources,
Inc.; officer of 51 of the investment companies in Franklin Templeton Investments; and FORMERLY, President, Chief Executive
Officer and Director, Property Resources Equity Trust (until 1999) and Franklin Select Realty Trust (until 2000).
--------------------------------------------------------------------------------------------------------------------------

Annual Report | 33

BARBARA J. GREEN (56) Vice President Vice President Not Applicable None
One Franklin Parkway and Secretary since 2000
San Mateo, CA 94403-1906 and Secretary
since 1996
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Deputy General Counsel and Secretary, Franklin Resources, Inc.; Secretary and Senior Vice President,
Templeton Worldwide, Inc.; Secretary, Franklin Advisers, Inc., Franklin Advisory Services, LLC, Franklin Investment
Advisory Services, Inc., Franklin Mutual Advisers, LLC, Franklin Templeton Alternative Strategies, Inc., Franklin
Templeton Investor Services, LLC, Franklin Templeton Services, LLC, Franklin Templeton Distributors, Inc., Templeton
Investment Counsel, LLC, and Templeton/Franklin Investment Services, Inc.; and officer of some of the other
subsidiaries of Franklin Resources, Inc. and of 51 of the investment companies in Franklin Templeton Investments; and
FORMERLY, Deputy Director, Division of Investment Management, Executive Assistant and Senior Advisor to the Chairman,
Counselor to the Chairman, Special Counsel and Attorney Fellow, U.S. Securities and Exchange Commission (1986-1995);
Attorney, Rogers & Wells (until 1986); and Judicial Clerk, U.S. District Court (District of Massachusetts) (until 1979).
--------------------------------------------------------------------------------------------------------------------------
RUPERT H. JOHNSON, JR. (64) Vice President Since 1996 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice President and Director,
Franklin Templeton Distributors, Inc.; Director, Franklin Advisers, Inc. and Franklin Investment Advisory Services,
Inc.; Senior Vice President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may
be, of some of the other subsidiaries of Franklin Resources, Inc. and of 49 of the investment companies in Franklin
Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
JOHN R. KAY (64) Vice President Since 1994 Not Applicable None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Templeton Worldwide, Inc.; Assistant Vice President, Franklin Templeton Distributors, Inc.; Senior Vice
President, Franklin Templeton Services, LLC; and officer of some of the other subsidiaries of Franklin Resources, Inc.
and of 35 of the investment companies in Franklin Templeton Investments; and FORMERLY, Vice President and Controller,
Keystone Group, Inc.
--------------------------------------------------------------------------------------------------------------------------
DIOMEDES LOO-TAM (65) Treasurer Since March Not Applicable None
One Franklin Parkway 2004
San Mateo, CA 94403-1906
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Officer of 15 of the investment companies in Franklin Templeton Investments; Consultant, MyVest Corporation (software
development company and investment advisory services); and FORMERLY, Director and member of Audit and Valuation Committees,
Runkel Funds, Inc. (2002-2003); Treasurer/Controller of most of the investment companies in Franklin Templeton Investments
(1985-2000); and Senior Vice President, Franklin Templeton Services, LLC (1997-2000).
--------------------------------------------------------------------------------------------------------------------------

34 | Annual Report

MICHAEL O. MAGDOL (67) Vice President Since 2002 Not Applicable Director, FTI Banque, Arch
600 Fifth Avenue - AML Chemicals, Inc. and
Rockefeller Center Compliance Lingnan Foundation
New York, NY 10020-2302
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Chief Banking Officer and Director, Fiduciary Trust Company International; and officer and/or director, as the
case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 48 of the investment companies in Franklin
Templeton Investments.
--------------------------------------------------------------------------------------------------------------------------
MARK MOBIUS (68) President President since Not Applicable None
17th Floor, The Chater House and Chief 1987 and Chief
8 Connaught Road Executive Executive Officer -
Central Hong Kong Officer - Investment
Investment Management
Management since 2002
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Portfolio Manager of various Templeton advisory affiliates; Managing Director, Templeton Asset Management Ltd.; Executive Vice
President and Director, Templeton Global Advisors Limited; and officer and/or director, as the case may be, of some of the
other subsidiaries of Franklin Resources, Inc. and of six of the investment companies in Franklin Templeton Investments; and
FORMERLY, President, International Investment Trust Company Limited (investment manager of Taiwan R.O.C. Fund) (1986-1987);
and Director, Vickers da Costa, Hong Kong (1983-1986).
--------------------------------------------------------------------------------------------------------------------------
MURRAY L. SIMPSON (67) Vice President Since 2000 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Executive Vice President and General Counsel, Franklin Resources, Inc.; officer and/or director, as the case may be, of
some of the subsidiaries of Franklin Resources, Inc. and of 51 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Chief Executive Officer and Managing Director, Templeton Franklin Investment Services (Asia)
Limited (until 2000); and Director, Templeton Asset Management Ltd. (until 1999).
--------------------------------------------------------------------------------------------------------------------------

Annual Report | 35

GALEN G. VETTER (52) Chief FinancialSince May 2004 Not Applicable None
500 East Broward Blvd. Officer and
Suite 2100 Chief
Fort Lauderdale, FL 33394-3091 Accounting
Officer
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Officer of 51 of the investment companies in Franklin Templeton Investments; Senior Vice President, Franklin Templeton
Services, LLC; and FORMERLY, Managing Director, RSM McGladrey, Inc.; and Partner, McGladrey & Pullen, LLP.
--------------------------------------------------------------------------------------------------------------------------

* We base the number of portfolios on each separate series of the U.S.
registered investment companies within the Franklin Templeton Investments fund
complex. These portfolios have a common investment adviser or affiliated
investment advisers.

** Charles B. 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 and
major shareholder of Franklin Resources, Inc. (Resources), which is the parent
company of the Fund's adviser and distributor. Harmon E. Burns is considered to
be an interested person of the Fund under the federal securities laws due to his
position as officer and director of Resources. Nicholas F. Brady is considered
to be an interested person of the Fund under the federal securities laws due to
his ownership interest in a subsidiary of Resources, as well as his director
positions with such company and certain other related companies. Note: Charles
B. Johnson and Rupert H. Johnson, Jr. are brothers.

THE SARBANES-OXLEY ACT OF 2002 AND RULES ADOPTED BY THE 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 OF TRUSTEES HAS DETERMINED
THAT THERE IS AT LEAST ONE SUCH FINANCIAL EXPERT ON THE AUDIT COMMITTEE AND HAS
DESIGNATED EACH OF FRED R. MILLSAPS AND FRANK A. OLSON AS AN AUDIT COMMITTEE
FINANCIAL EXPERT. THE BOARD BELIEVES THAT MESSRS. MILLSAPS AND OLSON QUALIFY AS
SUCH AN EXPERT IN VIEW OF THEIR EXTENSIVE BUSINESS BACKGROUND AND EXPERIENCE.
MR. MILLSAPS WHO IS CURRENTLY A DIRECTOR OF VARIOUS BUSINESS AND NONPROFIT
ORGANIZATIONS, HAS SERVED AS A MEMBER AND CHAIRMAN OF THE FUND AUDIT COMMITTEE
SINCE 1991 AND WAS FORMERLY CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF LANDMARK
BANKING CORPORATION AND FINANCIAL VICE PRESIDENT OF FLORIDA POWER AND LIGHT. MR.
OLSON WHO CURRENTLY SERVES AS CHAIRMAN OF THE BOARD OF THE HERTZ CORPORATION AND
WAS ITS CHIEF EXECUTIVE OFFICER FROM 1977 TO 1999; IS A DIRECTOR AND AUDIT
COMMITTEE MEMBER OF AMERADA HESS CORPORATION AND WHITE MOUNTAINS INSURANCE
GROUP, LTD. AND A FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER OF UNITED
AIRLINES. AS A RESULT OF SUCH BACKGROUND AND EXPERIENCE, THE BOARD OF TRUSTEES
BELIEVES THAT MR. MILLSAPS AND MR. OLSON 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. MESSRS. MILLSAPS AND OLSON ARE INDEPENDENT TRUSTEES AS THAT
TERM IS DEFINED UNDER THE APPLICABLE STOCK EXCHANGE RULES AND SECURITIES AND
EXCHANGE COMMISSION RULES AND RELEASES.

36 | Annual Report

Templeton Emerging Markets Fund

SHAREHOLDER INFORMATION

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group. Copies of the Fund's proxy voting records are also made available online
at franklintempleton.com and posted on the Securities and Exchange Commission's
website at sec.gov and reflect the 12-month period beginning July 1, 2003, and
ending June 30, 2004.

QUARTERLY STATEMENT OF INVESTMENTS

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

CERTIFICATIONS

The Fund's Chief Executive Officer - Finance and Administration is required by
the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that he is not aware of any violation by the Fund of
the Exchange's Corporate Governance Standards applicable to the Fund. The Fund
has filed such certification.

In addition, the Fund's Chief Executive Officer - Finance and Administration and
Chief Financial Officer and Chief Accounting Officer are required by the rules
of the SEC to provide certain certifications with respect to the Fund's Form
N-CSR and Form N-CSRS (which includes the Fund's annual and semi-annual reports
to shareholders) that are filed semi-annually with the SEC. The Fund has filed
such certifications with its Form N-CSRS for the six months ended February 29,
2004. Additionally, the Fund expects to file, on or before October 29, 2004,
such certifications with its Form N-CSR for the year ended August 31, 2004.

Annual Report | 37

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Literature Request

TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT 1-800/DIAL BEN(R)
(1-800/342-5236) OR VISIT FRANKLINTEMPLETON.COM. INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE,
WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING
TONE.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL
Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small Cap Growth Fund II 1
Franklin Small-Mid Cap Growth Fund

VALUE
Franklin Balance Sheet
Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 2
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 3
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 4

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Technology Fund
Franklin Utilities Fund
Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Corefolio
Allocation Fund
Franklin Templeton Founding Funds
Allocation Fund
Franklin Templeton Perspectives
Allocation Fund

TARGET FUNDS
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

INCOME
Franklin Adjustable U.S. Government Securities Fund 5
Franklin's AGE High Income Fund
Franklin Federal Money Fund 5, 6
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 3
Franklin Income Fund
Franklin Limited Maturity
U.S. Government Securities Fund 5, 7
Franklin Money Fund 5, 6
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund 5
Templeton Global Bond Fund

TAX-FREE INCOME 8
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 9
Tax-Exempt Money Fund 5, 6

LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS
California Intermediate-Term
Tax-Free Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
New York Intermediate-Term
Tax-Free Income Fund

STATE-SPECIFIC
Alabama
Arizona
California 10
Colorado
Connecticut
Florida 10
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 9
Michigan 9
Minnesota 9
Missouri
New Jersey
New York 10
North Carolina
Ohio 9
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance
Products Trust 11

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

2. The fund is only open to existing shareholders and select retirement plans.

3. The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.

4. Upon reaching approximately $350 million in assets, the fund intends to close
to all investors.

5. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

6. Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.

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

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

9. Portfolio of insured municipal securities.

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

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

09/04 Not part of the annual report

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030

ANNUAL REPORT
TEMPLETON EMERGING
MARKETS FUND

INVESTMENT MANAGER
Templeton Asset Management Ltd.

TRANSFER AGENT
Mellon Investor Services LLC
P.O. Box 3315
South Hackensack, NJ 07606-1915
Toll free number: 1-800/416-5585
Hearing Impaired phone number: 1-800/231-5469
Foreign Shareholders phone number: 201/329-8660
www.melloninvestor.com

FUND INFORMATION
1-800/342-5236

Investors should be aware that the value of investments made for the Fund may go
down as well as up. Like any investment in securities, the value of the Fund's
portfolio will be subject to the risk of loss from market, currency, economic,
political and other factors. The Fund and its investors are not protected from
such losses by the Investment Manager. Therefore, investors who cannot accept
this risk should not invest in shares of the Fund.

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

TLEMF A2004 10/04

ITEM 2. CODE OF ETHICS.

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

(d) N/A

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

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

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

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

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(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 $6,052 the fiscal year ended August 31, 2004 and $20,912 for the fiscal
year ended August 31, 2003.

(b) Audit-Related Fees
There were no 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.

The aggregate 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 the their financial
statements were $45,000 for the fiscal year ended August 31, 2004 and $3,614 for
the fiscal year ended August 31, 2003. The services for which these fees were
paid included attestation services.

(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.

There were no 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.

(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 $100 for the fiscal year ended August 31, 2004
and $0 for the fiscal year ended August 31, 2003. 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 $99,985 for the fiscal year ended August
31, 2004 and $876 for the fiscal year ended August 31, 2003. 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.

(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 pre-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 $145,085 for the fiscal year ended August 31, 2004 and $4,490
for the fiscal year ended August 31, 2003.

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

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Members of the Audit Committee are: Fred R. Millsaps, Frank J. Crothers, Frank
A. Olson and Constantine D. Tseretopoulos.

ITEM 6. SCHEDULE OF INVESTMENTS. N/A

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

The board of trustees of the Fund has delegated the authority to vote proxies
related to the portfolio securities held by the Fund to the Fund's manager
Templeton Asset Management Limited in accordance with the Proxy Voting Policies
and Procedures (Policies) adopted by the manager.

The manager has delegated its administrative duties with respect to the voting
of proxies to the Proxy Group within Franklin Templeton Companies, LLC (Proxy
Group), an affiliate and wholly owned subsidiary of Franklin Resources, Inc. All
proxies received by the Proxy Group will be voted based upon the manager's
instructions and/or policies.

To assist it in analyzing proxies, the manager subscribes to Institutional
Shareholder Services (ISS), an unaffiliated third party corporate governance
research service that provides in-depth analyses of shareholder meeting agendas,
vote recommendations, recordkeeping and vote disclosure services. In addition,
the manager subscribes to Glass Lewis & Co., LLC (Glass Lewis), an unaffiliated
third party analytical research firm, to receive analyses and vote
recommendations on the shareholder meetings of publicly held U.S. companies.
Although ISS' and/or Glass Lewis' analyses are thoroughly reviewed and
considered in making a final voting decision, the manager does not consider
recommendations from ISS, Glass Lewis or any other third party to be
determinative of the manager's ultimate decision. The manager votes proxies
solely in the interests of the Fund and its shareholders. As a matter of policy,
the officers, trustees and employees of the Fund, the manager and the Proxy
Group will not be influenced by outside sources whose interests conflict with
the interests of the Fund and its shareholders. All conflicts are resolved in
the interests of the manager's clients. In situations where the manager
perceives a material conflict of interest, the manager may: disclose the
conflict to the Fund's board of trustees; defer to the voting recommendation of
the Fund's board of trustees, ISS, Glass Lewis or those of another independent
third party provider of proxy services; or take such other action in good faith
(in consultation with counsel) which would protect the interests of the Fund and
its shareholders.

The recommendation of management on any issue is a factor which the manager
considers in determining how proxies should be voted, but is not determinative
of the manager's ultimate decision. As a matter of practice, the votes with
respect to most issues are cast in accordance with the position of the company's
management. Each issue, however, is considered on its own merits, and the
manager will not support the position of the company's management in any
situation where it deems that the ratification of management's position would
adversely affect the investment merits of owning that company's shares.

MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES The manager has adopted general
proxy voting guidelines, which are summarized below. These guidelines are not an
exhaustive list of all the issues that may arise and the manager cannot
anticipate all future situations. In all cases, each proxy will be considered
based on the relevant facts and circumstances.

BOARD OF DIRECTORS. The manager supports an independent board of directors, and
prefers that key committees such as audit, nominating, and compensation
committees be comprised of independent directors. The manager will generally
vote against management efforts to classify a board and will generally support
proposals to declassify the board of directors. The manager may withhold votes
from directors who have attended less than 75% of meetings without a valid
reason. While generally in favor of separating Chairman and CEO positions, the
manager will review this issue as well as proposals to restore or provide for
cumulative voting on a case-by-case basis, taking into consideration factors
such as the company's corporate governance guidelines or provisions and
performance.

RATIFICATION OF AUDITORS. In light of several high profile accounting scandals,
the manager will closely scrutinize the role and performance of auditors. On a
case-by-case basis, the manager will examine proposals relating to non-audit
relationships and non-audit fees. The manager will also consider, on a
case-by-case basis, proposals to rotate auditors, and will vote against the
ratification of auditors when there is clear and compelling evidence of
accounting irregularities or negligence.

MANAGEMENT & DIRECTOR COMPENSATION. A company's equity-based compensation plan
should be in alignment with its shareholders' long-term interests. The manager
evaluates plans on a case-by-case basis by considering several factors to
determine whether the plan is fair and reasonable, including the ISS
quantitative model utilized to assess such plans and/or the Glass Lewis
evaluation of the plans. The manager will generally oppose plans that have the
potential to be excessively dilutive, and will almost always oppose plans that
are structured to allow the repricing of underwater options, or plans that have
an automatic share replenishment "evergreen" feature. The manager will generally
support employee stock option plans in which the purchase price is at least 85%
of fair market value, and when potential dilution is 10% or less.

Severance compensation arrangements will be reviewed on a case-by-case basis,
although the manager will generally oppose "golden parachutes" that are
considered to be excessive. The manager will normally support proposals that
require a percentage of directors' compensation to be in the form of common
stock, as it aligns their interests with those of shareholders. The manager will
review on a case-by-case basis any shareholder proposals to adopt policies on
expensing stock option plans.

ANTI-TAKEOVER MECHANISMS AND RELATED ISSUES. The manager generally opposes
anti-takeover measures since they tend to reduce shareholder rights. On
occasion, the manager may vote with management when the research analyst has
concluded that the proposal is not onerous and would not harm the Fund or its
shareholders' interests. The manager generally supports proposals that require
shareholder rights' plans ("poison pills") to be subject to a shareholder vote
and will closely evaluate such plans on a case-by-case basis to determine
whether or not they warrant support. The manager will generally vote against any
proposal to issue stock that has unequal or subordinate voting rights. The
manager generally opposes any supermajority voting requirements as well as the
payment of "greenmail." The manager generally supports "fair price" provisions
and confidential voting.

CHANGES TO CAPITAL STRUCTURE. The manager will review, on a case-by-case basis,
proposals by companies to increase authorized shares and the purpose for the
increase and proposals seeking preemptive rights. The manager will generally not
vote in favor of dual-class capital structures to increase the number of
authorized shares where that class of stock would have superior voting rights.
The manager will generally vote in favor of the issuance of preferred stock in
cases where the company specifies the voting, dividend, conversion and other
rights of such stock and the terms of the preferred stock issuance are deemed
reasonable.

MERGERS AND CORPORATE RESTRUCTURING. Mergers and acquisitions will be subject to
careful review by the research analyst to determine whether each will be
beneficial to shareholders. The manager will analyze various economic and
strategic factors in making the final decision on a merger or acquisition.
Corporate restructuring and reincorporation proposals are also subject to a
thorough examination on a case-by-case basis.

SOCIAL AND CORPORATE POLICY ISSUES. The manager will generally give management
discretion with regard to social, environmental and ethical issues, although the
manager may vote in favor of those that are believed to have significant
economic benefits or implications for the Fund and its shareholders.

GLOBAL CORPORATE GOVERNANCE. Many of the tenets discussed above are applied to
proxy voting decisions for international companies. However, the manager must be
more flexible in these instances and must be mindful of the varied market
practices of each region.

The manager will attempt to process every proxy it receives for all domestic and
foreign proxies. However, there may be situations in which the manager cannot
process proxies, for example, where a meeting notice was received too late, or
sell orders preclude the ability to vote. The manager may abstain from voting
under certain circumstances or vote against items such as "Other Business" when
the manager is not given adequate information from the company.

Shareholders may view the complete Policies on-line at franklintempleton.com.
Alternatively, shareholders may request copies of the Policies free of charge by
calling the Proxy Group collect at 1-954/847-2268 or by sending a written
request to: Franklin Templeton Companies, LLC, 500 East Broward Boulevard, Suite
1500, Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Fund's
proxy voting records are available on-line at franklintempleton.com and posted
on the SEC website at WWW.SEC.GOV and reflect the twelve-month period beginning
July 1, 2003, and ending June 30, 2004.

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

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

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

ITEM 10. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

ITEM 11. EXHIBITS

(a) Code of Ethics

(b)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer

(b)(2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer

SIGNATURES

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

TEMPLETON EMERGING MARKETS FUND

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date October 29, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date October 29, 2004

By /s/GALEN G. VETTER
Chief Financial Officer
Date October 29, 2004