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Meet the Team

TEMIT is managed by an experienced investment team comprising of the following members:

Chetan Sehgal, CFA

Senior Managing Director, Director of Portfolio Management

Andrew Ness

Portfolio Manager, Franklin Templeton Emerging Markets Equity

Overview

Emerging market (EM) equities rose in the first quarter of 2026. Performance was supported by strong gains in January and February, driven by artificial intelligence (AI)-related momentum, before reversing in March as escalating geopolitical tensions and rising energy prices triggered a broad-based risk-off environment. For the quarter, the MSCI Emerging Markets Index returned 1.83% while the MSCI World Index delivered -1.65%, both in net UK-sterling terms.1

The emerging Asia region rose slightly, as domestic strength in several countries managed to dilute global pressures from a burgeoning conflict in the Middle East.2  South Korean and Taiwanese equities were strong performers as the AI theme continued to gain traction. Chinese and Indian equities bore some losses. In China, internet companies weakened on concerns of impact of higher AI investments on free cash flows and uncertainty around potential returns from these investments. Indian equities fell on rising oil prices, spurring concerns that a prolonged environment on higher oil prices could lead to higher inflation, fiscal deficit and squeeze on corporate margins.

Equities in the emerging Europe, Middle East and Africa region also rose, albeit marginally.3  The ongoing war in the Middle East has significantly disrupted the region, pushed oil prices higher, and raised the broader economic risk premium attached to Middle Eastern assets. At the same time, Saudi Arabia has held up relatively better, as it has been spared the worst of the direct conflict and its economy benefits more from sustained higher oil prices. Equities in the United Arab Emirates (UAE), in particular, were among the weakest performers in the region.

Equities in the emerging Latin America (LatAm) region ended higher, with most countries registering gains.4  Brazil’s central bank began the anticipated interest rate easing cycle. Petrobras (also held in the portfolio), Brazil’s largest listed company by market capitalisation, saw its share price rise steadily on expectations of higher earnings due to higher oil prices. Domestic inflation in Mexico saw a resurgence in early 2026, breaking the central bank’s upper threshold of 4%. Mexico’s central bank continued to reduce interest rates.

Portfolio Changes & Positioning

One of the biggest stock purchases for the quarter was in Trip.com, a leading online travel agent with its main operations in China. An antitrust investigation into the company affected Trip.com’s share price. While near-term uncertainty remains, we assess the potential impact as limited relative to the market’s reaction. The company retains strong brand recognition and market position. Therefore, we took advantage of the share-price dip to add the stock into the portfolio.

Overall, we increased investments in the financials, materials and health care sectors. In terms of countries, we undertook purchases in India, China/Hong Kong and South Africa.

We reduced our exposure to South Korea-based automobile company Hyundai Motor during the quarter to lock in profits on the back of a sustained rally in its share price. However, we remain optimistic on its automotive business and see additional optionality from its robotics business. The company has delivered successful models in recent years that have helped it to maintain a strong market position in a highly competitive environment.

By sector, we reduced our exposure to information technology, industrials and real estate. Geographically, we made the biggest sales in South Korea, the UAE and Thailand.

Positive Contributors

TEMIT’s net asset value returned 8.36% over the month, compared to the MSCI EM Index-NR’s result of 7.68%, both in UK-sterling terms.

South Korea based semiconductor company SK Hynix and Hyundai Motor were relative contributors. The former’s share price rose on the continued positive investment sentiment in AI and a strong favourable outlook. Hyundai Motor rose over news of its investment plan into new growth ventures. An underweight allocation to Chinese technology company Tencent Holdings was also a contributor.

Detractors

Cognizant Technology is a US-listed technology services company that derives much of its earnings from services provided from India. Its share price fell around concerns around AI-related disruption. Other detractors include global investment company Prosus and China’s leading online search platform Baidu.

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Outlook

On the last day of the month, geopolitical tensions in the Middle East increased, contributing to higher volatility in energy markets and global risk sentiment. Amid high uncertainty, we think, in comparison to developed markets, EMs still look relatively attractive and offer exposure to both domestic and international growth opportunities.

Several macroeconomic factors are contributing to this outlook. Expectations for further US interest rate cuts are supportive, as EM assets historically benefit from easier global financial conditions and a potential dollar softness. Earnings dynamics are also improving in parts of EMs. Domestic fundamentals have strengthened in recent years, providing economies with room to ease policy to support consumption.

Structural themes underpin the above, adding another dimension to the optimism we carry. Technology-heavy equity markets in Asia are benefitting from the global AI and semiconductor investment cycle, which has strengthened export demand and corporate profitability. AI continues to experience strong structural growth, with companies across a wide range of sectors leveraging AI to improve efficiency, enhance productivity and strengthen competitive positioning. Chinese industrial companies are benefitting from robust export demand to markets outside the United States, providing an offset to softer domestic dynamics.  

In our view, the drivers of the future performance of EM equities are likely to remain in place. However, instead of broad-based returns, performance is likely to appear in pockets of opportunities. We therefore favour an active, bottom-up investment approach, emphasising quality companies with strong balance sheets and competitive advantages.

The information provided is not a recommendation to purchase, sell, or hold any particular security and is not to be taken as advice. It should not be assumed that any securities transactions were or will be profitable.

  1. Source: MSCI. The MSCI World Index captures large- and mid-capitalisation representation across 23 developed market countries. The MSCI Emerging Markets Index captures large- and mid-cap representation across 24 emerging market (EM) countries. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges. Past performance is not an indicator or guarantee of future results. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI. Important data provider notices and terms available at www.franklintempletondatasources.com
  2. As measured by the MSCI EM Asia Index.
  3. As measured by the MSCI EM EMEA Index.
  4. As measured by the MSCI EM Latin America Index.

WHAT ARE THE KEY RISKS?

The value of shares in the Templeton Emerging Markets Investment Trust PLC (TEMIT) and any income received from it can go down as well as up and investors may not get back the full amount invested. There is no guarantee that TEMIT will meet its objective. TEMIT invests in the equity securities of emerging markets companies. Emerging markets have historically been subject to significant price movements, often to a greater extent than more established equity markets. As a result, the share price and net asset value of TEMIT can fluctuate over time. Performance may also be affected by currency fluctuations. TEMIT can borrow to purchase assets for the company; this will magnify any gains or losses made by the company. Shares of TEMIT are bought and sold on stock exchanges, typically, at any given time on any given day, the price you pay for a share will be higher than the price at which you could sell it. In addition, investors should be aware that TEMIT may trade at a discount to its Net Asset Value (NAV) per Share, and such discount may become larger in the future. TEMIT may take charges from the Company’s capital account. While this might allow a larger dividend to be distributed, it may also have the effect of reducing capital. For more details of all the risks applicable to TEMIT, please refer to the Key Information Document, Investor Disclosure Document and the risk section in TEMIT’s Annual Report, which can be downloaded from our website – www.temit.co.uk.
 

IMPORTANT INFORMATION

This material is intended to be of general interest only and should not be construed as investment advice. It does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares of Templeton Emerging Markets Investment Trust PLC (“TEMIT”). TEMIT is an alternative investment fund (“AIF”) for the purposes of the UK AIFM Directive and is incorporated as a public limited Company in Scotland.

Opinions expressed are the author’s at publication date and they are subject to change without prior notice. Investments in shares in TEMIT should only be made on the basis of the Investor Disclosure and Key Information Documents, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter.

Shares in investment trusts are traded on a stockmarket. The share price of investment trusts fluctuate in accordance with supply and demand and may not reflect the value of underlying net asset value of the shares.

TEMIT shall not be liable to any user of this material or to any other person or entity for the inaccuracy of information or any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission. Any opinions expressed are the author's at publication date and they are subject to change without prior notice. Any research and analysis contained in this material has been procured by TEMIT for its own purposes and is provided to you only incidentally. Data from third party sources may have been used in the preparation of this material and TEMIT has not independently verified, validated or audited such data.

There is no guarantee TEMIT will meet its objective. The value of shares in TEMIT and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. An investment in TEMIT entails risks. In emerging markets, the risks can be greater than in developed markets.

Investment trusts may borrow money in order to make further investments. This is known as 'gearing' and can enhance shareholder returns in rising markets but, conversely, can reduce them in falling markets. The majority of charges will be deducted from the capital of the company. This will constrain capital growth of the company in order to maintain the income streams. TEMIT may use financial derivatives or other instruments which entail specific risks more fully described in the company's documents.

TEMIT invests in the equity securities of emerging markets companies. Emerging markets have historically been subject to significant price movements, often to a greater extent than more established equity markets. As a result, the share price and net asset value of TEMIT can fluctuate over time. Performance may also be affected by currency f luctuations. For details of all the risks applicable to TEMIT, please refer to the Key Information Document, Investor Disclosure Document and the Principal and Emerging risks sections in the Annual Report. These documents can be found on our website: https://www.temit.co.uk/resources/literature or can be obtained, free of charge from the address below. TEMIT shares are not registered, marketed or promoted to US Persons. Shares of TEMIT are available for sale on the London and New Zealand stock exchanges.

References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. Indices are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. lAll index data is provided “as is.”

The portfolio described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the portfolio described herein. Copying or redistributing the MSCI data is strictly prohibited. © 2026 Morningstar, Inc. All rights reserved. You will find more information at www.morningstar.com

Franklin Templeton Investment Trust Management Ltd (registered in Scotland SC460631) is the Alternative Investment Fund Manager to Alternative Investment Funds.

Issued by Franklin Templeton Investment Management Limited (FTIML), Cannon Place, 78 Cannon Street, London EC4N 6HL. FTIML is authorised and regulated by the Financial Conduct Authority. Information about TEMIT can be found on the TEMIT website https://www.temit.co.uk

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