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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 strengthened in January 2026. Equity gains within EMs were largely driven by domestic developments, as EMs collectively shrugged off geopolitical tensions around Iran, Venezuela and Greenland. For the month, the MSCI Emerging Markets Index returned 6.70% while the MSCI World Index delivered 0.21%, both in net UK-sterling terms.1

Stocks in the emerging Asia region advanced.2 Equities in South Korea and Taiwan reported outsized gains as some of their largest technology corporations reported stronger-than-expected quarterly results, underscoring the positive sentiment around artificial intelligence (AI). South Korea’s defence companies also performed well, benefitting from increased military spending globally. Taiwan’s gains were further driven by a trade deal with the United States, which will see Taiwan’s tariff rate be in line with levies on neighbouring countries like Japan and South Korea. Chinese stocks also closed higher, fuelled by the sustained optimism over the country’s AI advances, and notable strengths in food delivery and technology stocks on reports of an extension of an anti-involution crackdown that started in 2025.  

However, Indian equities descended as they traded against headwinds from continued outflows, and stagnation in trade negotiations with the United States. Indonesian equities plunged after a possible downgrade of the country’s stock benchmark to frontier status or a lowering of the country’s weighting in benchmark indices.
Equities in the emerging Europe, Middle East and Africa (EMEA) region also collectively ended higher.3Saudi Arabian equities rose after the kingdom opened its capital markets to all categories of foreign investors to boost inflows, and enacted transformative reforms to its real estate sector. Other select Gulf markets advanced on corporate earnings and firmer oil prices.

Equities in the emerging Latin America region rose.4 Brazil’s annual inflation for 2025 came in slightly lower than expected and was a welcome surprise. On the export front, Brazilian exports were resilient, brushing off months of US tariffs by expanding shipments to other major trading partners. Mexican equities were lifted by a combination of factors such as a weaker US dollar and rising commodity prices.

Portfolio Changes & Positioning

Trip.com is a leading online travel agent with its main operations in China. An antitrust investigation on the company affected Trip.com’s share price. Although the investigation is a negative for the short term, we think that the fundamental impact of any potential penalties and required operational remediation on the business is likely to be materially smaller than the decline in the company’s market capitalisation following this event. Trip.com enjoys high mind share among users and should therefore be able to maintain its market leadership. Therefore, we took advantage of the share price dip to add the stock into the portfolio.

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

We trimmed our exposure to Hyundai Motor as the stock experienced a rally this month. 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 energy. Geographically, we made the biggest sales in Thailand, Taiwan and South Korea.

Positive Contributors

TEMIT’s net asset value returned 12.00% over the month, compared to the MSCI EM Index-NR’s result of 6.70%, both in UK-sterling terms.

South Korea based SK Hynix and Hyundai Motor were relative contributors. The share price of the former, a semiconductor company, climbed on a fourth-quarter earnings beat. Automobile company Hyundai Motor gained over optimism over the group’s robotics and humanoid robot businesses. Taiwan-based chip designer MediaTek was also a relative contributor.

Detractors

Leading global investment company Prosus saw its share price decline, widening the discount of the value of Prosus’ underlying holdings. Banking companies ICICI Bank (in India) and China Merchants Bank (in China) also detracted.

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Outlook

The outlook for EM equities in 2026 is supported by several investment themes that we believe will be a driver of earnings momentum.

The year started with the optimism on AI lending its strength to the broader information technology sector. We believe that AI will be a strong investment case across major EMs, with companies providing electronic manufacturing, power supply units and printed circuit-board services also standing to benefit.

The trickle-down effects of AI extend to power. This has resulted in higher demand for power equipment, such as energy storage batteries. We see opportunities in China’s industrial companies, which are meeting the needs of power infrastructure both domestically and internationally.

Supportive policies underpin the above broader investment themes. China has extended its anti-involution campaign into 2026, and we expect corporate earnings of Indian companies in 2026 to reflect the country’s policy support. Brazil is well-positioned to benefit from a more accommodative interest-rate environment in 2026, and Mexico continues to be supported by nearshoring dynamics and its strategic proximity to the United States.

Overall, EM equities offer differentiated opportunities, best approached with a disciplined, selective strategy. Compelling long-term themes and supportive valuations in parts of EMs are among reasons for our optimism for 2026.

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.

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.

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