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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 recovered and rose in April 2026. Equities staged a recovery from a sharp decline in March 2026 following a ceasefire in the Middle East. For the month, the MSCI Emerging Markets Index returned 11.32% while the MSCI World Index delivered 6.35%, both in net UK-sterling terms.1

Stocks in the emerging Asia region advanced.2 Artificial intelligence (AI) related drivers won out over energy price concerns in the larger equity markets of South Korea, Taiwan and China. The strength in the equity markets of both South Korea and Taiwan was driven by the countries’ largest companies, which are constituents of the information technology sector. Strong quarterly earnings and expectations of robust AI demand supported these stocks. Stronger-than-expected economic data in China, namely better-than-expected economic growth for the first quarter and the first growth in the producer price index since September 2022, was a bright spot.

Indian equities recouped some of the losses following the onset of the Middle East conflict and rose in April, but experienced sharp swings throughout the month while foreign outflows deepened.

Equities in the emerging Europe, Middle East and Africa region achieved moderate gains.3 A ceasefire in the Middle East conflict, followed by a ceasefire extension, eased concerns and brought hopes for a de-escalation. The United Arab Emirates (UAE) announced its departure from both OPEC and OPEC+, effective on May 1, 2026.4 This helped to send UAE-listed oil companies higher reflecting expectations of greater production flexibility.

Equities in the emerging Latin America (LatAm) region advanced. 5 Mexican equities slipped marginally in sterling terms. Preliminary data suggested that Mexico’s real gross domestic product growth was largely stagnant, coming in close to zero on a year-on-year basis in the first quarter of 2026. Brazilian equities rose; Brazil’s position as a net energy exporter with domestic oil production facilities provides a positive backdrop for Brazilian assets.

Portfolio Changes & Positioning

During the period, we initiated a new position in Henan Pinggao Electric, a leading high-voltage equipment manufacturer in China, with over 70% of its profit derived from high-voltage gas insulated switchgear systems. China’s planned grid investment is expected to support demand, while increasing value-added products and efficiency improvements are expected to support profitability.

Overall, we increased investments in the industrials, financials and consumer discretionary sectors. In terms of countries, we undertook purchases in China/Hong Kong and India.

We reduced our position in Taiwan-based semiconductor chip designer MediaTek on the back of a share price rally to take some profit. However, MediaTek remains a key holding in the portfolio. The company is expanding its operations into a diversified compute-chip provider, with additional growth potential from its emerging AI chip business via its partnership with Google (not a portfolio holding) and other potential customers.

By sector, we reduced our exposure to information technology, consumer staples and real estate. Geographically, we made the biggest sales in South Korea, Taiwan and Turkey.

Positive Contributors

TEMIT’s net asset value returned 14.90% over the month, compared to the MSCI EM Index-NR’s result of 11.32%, both in UK-sterling terms.

The AI theme continued to influence the top contributors for the month. South Korean semiconductor company SK Hynix was a top performer, supported by a sustained AI chip rally and an earnings beat for the first quarter of 2026. MediaTek’s share price gained on investor sentiment over MediaTek’s role in Google’s (not a portfolio holding) new tensor processing units, and its partnership to co-develop a smartphone. The world’s largest printed circuit board manufacturer Zhen Ding was also a contributor.

Detractors

Grupo Financiero Banorte is a leading financial institution in Mexico. While the company’s first-quarter results reflected resilient operating performance, some headline noise in the form of expected total loan growth and a higher cost of risk (or higher provisions) weighed on its share price. Other detractors included leading Chinese electric vehicle (EV) and battery manufacturer BYD and US-listed India-based technology services company Cognizant Technology.

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Outlook

The outlook for EM equities reflects a mix of improving earnings trends and ongoing geopolitical and structural risks, leading to a more selective opportunity set. Geopolitics and domestic political cycles continue to influence capital flows, commodities and sentiment, while growth remains uneven across regions and sectors. 

At time of writing, tensions in the Middle East seem to have de-escalated with the announcement of a two-week ceasefire. However, this is a near-term de-escalation rather than a resolution, but underlying issues remain unresolved and the situation is still fragile. We are actively monitoring the situation across geopolitical, energy and market channels. In terms of our exposure to the Middle East, the portfolio has historically maintained a structural underweight given its economic sensitivity to oil prices and global growth dynamics. That positioning remains in place as we continue to remain cautious on the Middle East amid ongoing geopolitical tensions. In addition, we believe that there could be longer-term implications for the UAE, particularly through weaker business confidence and potential delays in investment recovery. 

On the positive side, structural growth themes are evident, with AI being unarguably one of the key drivers. While there have been bouts of volatility in the AI trade, demand for AI continues to expand. This is driven by increased uptake, improvements in model performance and widening productivity gains. As such, several South Korean semiconductor firms have reaffirmed this growing demand, which they foresee to persist through the medium term. Taiwan, South Korea and China are crucial components of the global technology supply chain and stand to benefit, thereby supporting earnings outlook.

The domestic front also brings about a positive backdrop. Brazil has finally embarked on its interest rate reduction cycle, which we have been anticipating for some time. However, the geopolitical tensions in Middle East could have an impact on the global interest rate trajectory. South Korea has also seen some positive progress in corporate reforms --the latest being mandatory share cancellation as well as cumulative voting.

Overall, EM equities offer valuation support and cyclical tailwinds, but within a context of elevated uncertainty and divergence. The opportunity set favours active, selective allocation, with our local presence presenting us first-hand insights. We remain focused on our bottom-up approach, including our engagement with management, to identify companies which have growth potential in the current environment.

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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