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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

Global equities advanced further in October, buoyed by a second US Federal Reserve (Fed) rate cut this year and easing US-China trade tensions late in the month. For the month, the MSCI Emerging Markets Index returned 6.75% while the MSCI World Index rose by 4.52%, both in net UK-sterling terms.1

Stocks in the emerging Asia region collectively rose.2 Indian equities continued to recover as the central bank kept its key repurchase rate—the interest rate at which a central bank lends to commercial banks—unchanged and revised its economic growth forecasts upwards on the back of falling inflation. Banking stocks were boosted by strong quarterly business updates from index heavyweights. Record sales during the Diwali holiday period also acted as a tailwind for the general Indian equity market. South Korea’s two largest chip firms, Samsung Electronics and SK Hynix, rose on strong quarterly results and positive outlook.

Chinese equities pulled back over the month. A resurgence of US-China tensions featured at the start of the month but calmed down upon a meeting of both countries’ leaders. This culminated in a one-year trade truce. China’s Fourth Plenum, which reiterated the country’s commitment to self-reliance in science and technology, lent some support to Chinese technology stocks.

Equities in the emerging Europe, Middle East and Africa (EMEA) region collectively advanced.3 Most central banks in the Gulf Cooperation Council reduced their key interest rates, tracking the decision by the Fed. Healthy corporate earnings locally also added a boost to the advancement of the region as a whole.

Equities in the emerging Latin America (LatAm) region rose.4 Brazilian equities rallied as the US Senate passed a bill to terminate US tariffs against Brazil. In Mexico, preliminary data showed a contraction in its third-quarter economic growth from the previous quarter, marking the country’s first year-on-year quarterly decline since 2021.

Portfolio Changes & Positioning

During the month, we continued to add on to our existing holdings of BYD, a leading electric vehicle and battery manufacturer in China, as we see strong potential in its vehicles and batteries in both the domestic and export markets.

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

We continued to trim our position in SK Hynix, a South Korean semiconductor company and a maker of memory chips, on the back of a share price advancement. SK Hynix, however, still remains a key portfolio holding as it retains a leadership position in the high-bandwidth memory market.

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

Positive Contributors

TEMIT’s net asset value returned 9.57% over the month, compared to the MSCI EM Index-NR’s result of 6.75%, both in UK-sterling terms.

In South Korea, SK Hynix and automobile company Hyundai Motor were relative contributors. The former rose after the company reported a record quarterly profit for the third quarter of 2025 and guided that their memory chip lineup for 2026 had sold out. Hyundai Motor’s share price rose on the Korea-US tariff negotiations, which reduced 25% tariffs on Korean automobiles and parts to 15%, and a partnership to accelerate innovation in autonomous vehicles. The world's largest semiconductor foundry company, Taiwan Semiconductor Manufacturing Company, was also a relative contributor.

Detractors

ICICI Bank is a leading India-based private sector bank. Its share price inched downwards with the broader Indian equity market. In our view, the bank remains well-positioned with its healthy capital adequacy ratios and strong franchise. Other relative detractors included Chinese technology company Tencent Holdings and South Korean holding company LG Corp.

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Outlook

The outlook for emerging markets (EMs) has stabilised amid US-dollar weakness and a clearer global trade landscape. Trade policy uncertainties are fading, and EMs have taken a more conciliatory approach, seeking trade diversification while limiting the fallout from tariffs.

The anticipation of tariff-related economic slowdown has collided with fast developments in AI. Together with the pace of interest-rate cuts, collectively, the above factors should continue to be key drivers for EMs.

While there still remains uncertainty on US tariffs, direct impact of US tariffs on our portfolio holdings is limited. Most of the companies the portfolio are industry leaders, and this allows them to alleviate the impact of tariffs by passing on the extra costs to the supply chain and customers. The semiconductor supply chain should continue to be a key beneficiary from investments in AI, and it remains a key overweight sector in the portfolio.

Chinese equities performed well, from policy initiatives and a friendlier stance towards the private sector. While India traded against tariff headwinds, we expect the situation to stabilise eventually. Brazilian equities shrugged off elevated US tariffs and are trading at deeply discounted valuations with attractive dividend yields.

We continue to remain upbeat about EM economies. Despite the current environment of slowing growth and geopolitical issues globally, we have confidence in both the EM asset class and our strategies. We continue to seek high-quality business with solid balance sheets, competitive advantages and attractive valuations.

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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