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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) stocks fell in July 2026. Renewed tensions in the Middle East increased market volatility. Technology stocks came under pressure as investors reassessed the potential returns from substantial artificial intelligence (AI)-related capital spending and elevated valuations. For the month, the MSCI Emerging Markets Index returned -4.41%. The MSCI World Index delivered -0.87%, both in net UK-sterling terms.1

The emerging Asia region slipped. Technology stocks in both South Korea and Taiwan sold off following strong gains linked to the AI boom. Concerns about returns and sustainability of AI investments, together with forced deleveraging amplified the declines. The Bank of Korea also raised its benchmark interest rate for the first time in three-and-a-half years. Indian equities rose marginally. Domestic information technology stocks bucked the global trend and performed well. Chinese stocks also rose as internet stocks staged a recovery towards the end of the month

Equities in the emerging Europe, Middle East and Africa region posted small gains. Stock indices in the Middle East markets were mixed with Saudi Arabian equities falling after renewed regional tensions weighed on sentiment. In South Africa, inflation picked up more than expected. While this reinforced expectations of a second consecutive interest rate hike, the South African central bank held rates.

Equities in the emerging Latin America (LatAm) region ended higher. Brazilian equities rose as a softer-than-expected mid-July inflation reading reinforced expectations that the central bank could continue reducing interest rates. Two of Mexico’s largest companies, mining and railway operator Grupo Mexico and banking firm Grupo Financiero Banorte, saw their share prices rise following strong results. This helped to anchor the Mexican equity market.

Portfolio Changes & Positioning

During the period, we increased our position in FIT Hon Teng, a manufacturer and distributor of electrical components, including connectors, cables, and wireless devices. Its share price weakened amid the broader correction in AI-related technology stocks, and we took the opportunity to build our position. The company historically relied on the mature consumer electronics and personal computing markets, but its business mix is shifting towards higher-growth areas, including AI data centres, electric vehicles (EVs) and audio products. We believe this transition could support its longer-term growth and profitability

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

We trimmed our position in Zhen Ding, the largest printed circuit board (PCB) manufacturer in the world, to realise some profit after a prolonged period of share price gains. In our view, Zhen Ding still has its merits. It should benefit from the demand growth in advanced PCB products from new consumer devices and industrial products. Its expanding integrated circuit substrate business also provides an additional source of longer-term growth as the company builds scale in advanced semiconductor packaging.

By sector, we reduced our exposure to energy, health care and utilities. Geographically, we made the biggest sales in Peru, Brazil and South Korea.

Positive Contributors

TEMIT’s net asset value returned -5.01% over the month, compared to the MSCI EM Index-NR’s result of -4.41%, both in UK-sterling terms.

Chinese EV and battery manufacturer BYD led contributors. The core drivers behind BYD’s share price increase included record overseas sales in June 2026, which supported a second consecutive month of year-on-year sales volume growth, alongside continued expansion in markets such as Japan. Cognizant Technology is a US-listed technology services company that derives much of its earnings from services provided from India. Its shares rose during July amid a broader rebound in technology services stocks and a series of expanded AI partnerships. Prosus, a leading global investment company and the largest shareholder of Tencent Holdings, also contributed.

Detractors

Semiconductor companies SK Hynix and MediaTek led detractors, due to profit taking after a strong prior rally, concerns over returns on AI investments and increasing competition from Chinese companies. We continue to remain positive on these two companies. Given the tight memory supply, continued demand for high-bandwidth memory (HBM), our optimism on SK Hynix centres on its leading position in HBM. This includes the latest HBM4. In our longer term view, MediaTek should be a key beneficiary of the demand growth for chips used in Internet of Things (IoT), automotive, industrial and wi-fi applications. It could also be a beneficiary of the proliferation of new AI applications in various technology devices, which could require on-device AI computing.

Additionally, Zhen Ding’s share price also fell and became a detractor.

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Outlook

EM equities experienced heightened volatility in July, with South Korean equities particularly affected following strong gains earlier in the year. The correction reflected concerns on returns of AI-related capital expenditure, valuations in parts of the market, rising funding rates and an unwinding of leveraged positions. While the volatility could continue, our investment approach avoids identifying market peaks or troughs. Instead, we continue to invest in companies where fundamentals, competitive positions and valuations justify risks.

We continue to view AI as a long-term theme for EMs. Within memory, we see structural growth drivers for high-bandwidth memory, supported by expanding AI applications and rising memory requirements. HBM also has higher technical and customer-qualification barriers than conventional memory, reflecting complex manufacturing, advanced packaging and increasingly customised designs

The EM growth opportunity extends beyond AI. The expansion of EVs, renewable energy and energy-storage capacity is increasing the need for grid investment, supporting demand for SF6-free switchgear (which uses alternative insulation and technologies instead of sulphur hexafluoride), energy-storage systems and power-management solutions. Digitalisation and consumption represent additional long-term themes.

We believe structural growth themes can support long-term returns. Given the wide dispersion across markets, we continue to focus on companies with strong balance sheets and durable earnings, while maintaining our valuation discipline.

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

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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