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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

Pessimism over a US interest-rate reduction in December put a cap to performance. Concerns regarding stretched valuations in artificial intelligence (AI)-related stocks also pressured global indices. For the month, the MSCI Emerging Markets (EM) Index returned -3.21% while the MSCI World Index delivered -0.56%, both in net UK-sterling terms.[1]  

Stocks in the emerging Asia region collectively fell.[2] Technology stocks in South Korea and Taiwan took heed from global sentiment and weakened from concerns over elevated equity valuations. Chinese equities were impacted by rising geopolitical tensions, this time between China and Japan.

However, Indian equities ascended, albeit marginally. Market sentiment was largely positive, with cooling local inflation, encouraging progress towards a US-India trade deal and lower oil prices. Corporate earnings were largely positive, which also helped to buoy Indian equities upwards. The nation’s economic growth in the July-September quarter came in at 8.2% from a year ago, the fastest in 18 months, in a show of resilience. This rounded up a month of positive events.
Equities in the emerging Europe, Middle East and Africa (EMEA) region also collectively declined.[3] Weaker oil prices dampened investor sentiment for Middle Eastern equities, with disappointing corporate earnings in Saudi Arabia adding to subdued equity performance. South African equities, however, bucked the regional trend and ended higher over stronger national growth prospects and an improving fiscal outlook.

Equities in the emerging Latin America region rose.[4] Regional performance was largely supported by an upswing in Brazilian equities. Lower-than-expected inflation statistics for October 2025 paved hopes that an easing cycle may be on the cards soon. Annual inflation for Mexico also decelerated in October, and the Mexican central bank reduced its benchmark rate further. The rate now stands at 7.25%, the lowest level since May 2022.

Portfolio Changes & Positioning

During the month, we continued to increase our holdings in BYD, a leading electric vehicle (EV) and battery manufacturer in China. The share price has been weak on concerns over weaker near-term volumes in the domestic market. However, we remain optimistic on its vertically integrated EV business model which has significant scope to gain share in the overseas market. It is also a leading supplier of energy storage systems batteries, which is seeing strong growth in both China and overseas.

Overall, we increased investments in the financials, consumer discretionary and real estate sectors. In terms of countries, we undertook purchases in Taiwan, India and the United Arab Emirates.

We reduced our position in Prosus, a leading global investment company and the largest shareholder of Tencent Holdings, a Chinese technology company. Prosus’ share price has strengthened year-to-date and it remains one of the key holdings in the portfolio. We are positive on prospects of Tencent and some of the other holdings of Prosus, which is available at a discount to its net asset value (NAV). Prosus continues to execute buybacks, which could narrow the discount to its NAV and provide support to returns.

By sector, we reduced our exposure to information technology, communication services and health care. Geographically, we made the biggest sales in South Korea, Indonesia and Mexico.

Positive Contributors

TEMIT’s net asset value returned -3.66% over the month, compared to the MSCI EM Index-NR’s result of -3.21%, both in UK-sterling terms.

Genpact is a US-listed technology services company that derives much of its earnings from services provided from India. Its share price jumped after the company reported strong third-quarter results and revised its guidance for the full year upwards. Other contributors include Weichai Power, a China-based manufacturer of vehicle and related parts, and Banco Bradesco, Brazil’s leading private sector bank.

Detractors

A sectoral move in AI-related stocks led to a decline in the share prices of South Korea-based SK Hynix and Taiwan-based Hon Hai Precision. We continue to remain optimistic on both companies; the former on earnings prospects driven by strong demand for high bandwidth memory chips for AI and the latter over its strong market position in AI servers, among other reasons. Another detractor came in the form of Prosus, a leading global investment company and the largest shareholder of Tencent Holdings (also held by the portfolio), a Chinese technology company.

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Outlook

Amid ambiguity stemming from tariffs and trade wars, EM equities have shown resilience. Part of this strength can be attributed with AI-related optimism. Most countries have continued with monetary easing to balance domestic policies. We expect this to continue into 2026, albeit at a more cautious pace.

EMs are not homogenous; hence, there will be different opportunities in the asset class’s constituents. The AI supply chain in Taiwan and Korea has continued to deliver strong growth. China is increasingly gaining recognition of its ability to innovate. A strategic push for technological self-sufficiency and more targeted policy support could allow us to experience a more sustained rally in Chinese equities. India’s reform agenda—which has included a revamp in its tax structure—is starting to flow to corporate earnings. Earnings for the second-quarter fiscal-year 2026 have improved from moderating inflation, recent tax cuts and lower borrowing costs.

 

Interest rates have peaked in Brazil and there are now expectations of cuts in 2026, which should be positive for Brazil equities. The prospect of a more fiscally responsible government in the fourth quarter of 2026 may provide another uplift to domestic equities.

We underpin the above opportunities—and risks—with the bottom-up view of the investment landscape in EMs. There are still numerous companies with long-term earnings power in the investment universe. Our on-the-ground teams are equipped with access to company management, which is crucial in our assessment.

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

Past performance is not an indicator or a guarantee of future results. 

This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares of TEMIT. Nothing in this document should be construed as investment advice. Opinions expressed are the author’s at publication date and they are subject to change without prior notice. Given the rapidly changing market environment, Franklin Templeton Investments disclaim responsibility for updating this material. Subscriptions to TEMIT can only be made on the basis of the Key Information Document (“KID”), accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. Please consult your professional adviser and read the KID before deciding to invest.

An investment in TEMIT entails risks as outlined above. References to particular industries, sectors or companies are for general information and are not necessarily indicative of TEMIT’s holding at any one time. References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged, and one cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton Investments fund.

All MSCI 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. © 2025 Morningstar, Inc. All rights reserved. You will find more information at www.morningstar.com. Franklin Templeton shall not be liable to any user of this document 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.

There is no guarantee that TEMIT will achieve its objective. For a free copy of the KID, the annual report and semi-annual report, if published thereafter or for more information contact: Franklin Templeton Investments, Telephone: 0800 305 306, Email: [email protected] or write to us at the address below. Alternatively, the information can be downloaded from our website www.temit.co.uk.

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