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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 February 2026. Trade headlines re-entered the picture, with the US Supreme Court overturning tariffs imposed by President Trump. For the month, the MSCI Emerging Markets Index returned 7.68% while the MSCI World Index delivered 2.82%, both in net UK-sterling terms.1

Stocks in the emerging Asia region advanced.2 Diversification in Asia’s technology stocks saw chip-related names in South Korea and Taiwan jump, but major technology platforms in China were pressured. Intense e-commerce competition and higher correlation with a more volatile global equity market pushed their share prices lower. This saw uneven equity performance across major Asian economies—while Taiwan and South Korea advanced, China fell behind.

Indian equities gained following the announcement of a trade deal with the United States early in the month, the steadying of the benchmark repo rate and signs of stability in the Indian rupee. However, performance was curbed as software services firms in India sold off amid concerns that artificial intelligence (AI) could disrupt their labour-heavy business models.

Equities in the emerging Europe, Middle East and Africa (EMEA) region collectively ended higher.3 Stock markets in the Gulf region were mixed. Saudi Arabian equities saw losses as the kingdom’s budget deficit widened due to higher expenditures. The United Arab Emirates saw some support in its Dubai-listed banking stocks. South African equities benefitted from an ease in its inflation rate in January, supporting expectations of continued monetary policy stability.

Equities in the emerging Latin America region rose, but performance was uneven across countries.4 Both Brazil and Mexico registered economic growth in 2025 from a year ago. Mexican equities were also lifted by the weakening dollar. Chilean equities fell, as did commodity prices.

Portfolio Changes & Positioning

During the period, one of our largest stock purchases was in Lite-On Tech, a world-leading provider of optoelectronic semiconductor components and power management modules. The company is a major beneficiary of the rapid growth of AI servers and the resultant requirements for power management systems. This trickles down to a variety of Lite-On’s solutions, including power supply units and battery backup units. A gradual shift in the company’s product mix and a focus on profitability has led to margin improvements, which offers us visibility and provides potential for higher dividend payouts.

Overall, we increased investments in the financials sector. In terms of countries, we undertook purchases in Taiwan and India.

We continued to taper our exposure to South Korea-based automobile company Hyundai Motor 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 some notably 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 consumer discretionary. Geographically, we made the biggest sales in South Korea, Thailand and Hungary.

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

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. © 2026 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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