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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 slipped slightly in the third quarter of 2026 against a backdrop of a U.S. Federal Reserve interest-rate hike and continued geopolitical tensions in the Middle East.  For the quarter, the MSCI Emerging Markets Index returned -0.46%. The MSCI World Index delivered 1.79%, both in net UK-sterling terms.1

The emerging Asia region declined, with South Korean equities leading regional losses. Technology stocks in both South Korea and Taiwan came under pressure in July following a prolonged period of strong performance linked to the artificial intelligence (AI) boom. Investors reassessed the potential returns from substantial AI-related capital spending, elevated valuations and rising financing costs. However, these shares recovered in August and September, supported by substantial shareholder return announcements of key memory companies, alongside still- favourable fundamentals. Taiwanese equities were more resilient and rose for the quarter. The broader semiconductor and integrated circuit ecosystem were lifted by a global rally in technology stocks.

Chinese equities rose, although performance across sectors diverged. State-backed interventions in the equity market helped to support returns. However, there was a mild downturn towards the end of the period. The lack of a major breakthrough in US-China talks and macro weakness also weighed on Chinese equities. Indian stocks declined. Energy price shocks led to an acceleration in inflation, with both annual retail and wholesale prices rising in August. Leadership and governance uncertainty at a major Indian conglomerate weighed on the share prices of several listed group companies.

Equities in the emerging Europe, Middle East and Africa region advanced. Geopolitical uncertainty and volatility in energy prices picked up towards the end of the period. Equities in the United Arab Emirates rose after August survey data showed that the country’s non-oil private sector expanded at a solid pace. Polish equities experienced a strong rally.

Equities in the emerging Latin America (LatAm) region ended higher. Brazilian equities performed well. An improving inflation backdrop— monthly inflation in August posted the steepest decline in four years—paved the way for the fifth interest rate cut in September. In total, this quarter saw two rate cuts. Mexican equities dipped.  This largely reflected weakness in September, with a sharp fall in the peso also weighing on returns in sterling terms.

Portfolio Changes & Positioning

We added to our existing holdings of FIT Hon Teng, which is a manufacturer and distributor of electrical components, including connectors, cables, and wireless devices. Traditionally, its business relied on the mature consumer electronics and personal computing segments. However, the company’s strategic pivot into high-margin segments such as AI data centres, electric vehicles and audio serves as a primary long-term upside for the stock.

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

One of our largest trims in the quarter was in MediaTek, a Taiwan-based semiconductor company evolving into a more diversified compute-chip provider, to manage its active position in the portfolio. The investment thesis, however, remains firmly in place. In our long-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.

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

Positive Contributors

TEMIT’s net asset value returned -0.08% over the quarter, compared to the MSCI EM Index-NR’s result of -0.46%, both in UK-sterling terms.

WuXi Biologics is a Chinese contract research, development, and manufacturing organisation. Its share price rose due to a results beat for the first half of 2026. The country’s five-year plan for the pharmaceutical industry also lent some support to the share price towards the end of the period. Lite-On Tech is a world-leading provider of optoelectronic semiconductor components and power management modules. The company released a strong set of second-quarter results in late July. Another contributor was LG Corp, a South Korean holding company and owns stakes in several companies across various industries such as electronics, chemicals, EV (electric vehicle) batteries and household products.

Detractors

SK Hynix is a South Korean semiconductor company and a maker of memory chips. Its share price fell sharply at the start of the quarter, driven by profit taking after strong performance, concerns over AI investment returns and increasing competition from Chinese companies. Zhen Ding is the largest printed circuit board (PCB) manufacturer in the world. Its share price first fell alongside a pullback in other AI supply chain, and PCB stocks in the region. Sentiment was also affected by a planned share sale by one of its shareholders. Another source of weakness stemmed from FIT Hon Teng.

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Outlook

We remain positive on EM stocks. The capital expenditure on AI continues to propel earnings growth revisions for semiconductor companies and indirect beneficiaries within the AI supply chain.  

While AI has garnered a lot of focus, returns remain diversified. In EMs, different economies bring about their own growth drivers. On a more general level, we are also observing more companies extolling capital discipline and improving their shareholder return policies.

The investment case for China involves the global competitiveness of its industrial companies, particularly in areas such as EVs, power equipment and energy-related products. We are seeing these companies grow across both domestic and export markets. In India, a young population and rising incomes bring about a shift in the way Indians consume. An example is in the rise of digital consumer businesses.  In Brazil, election remains at central stage, and the outcome can be positive for the long-term outlook.

Overall, EM stocks remain well placed for the future. However, fundamentals, government policies and investment opportunities vary widely. This makes an active, bottom-up investment approach especially important.

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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