Portfolio And Performance

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Company objective

To provide long term capital appreciation for its shareholders through investment in companies listed in emerging markets or companies which earn a significant amount of their revenues in emerging markets, but are listed on stock exchanges in developed countries.

TEMIT has been helping investors access the dynamic growth potential of emerging markets companies since 1989.

More about TEMIT

Quick factsAs of 30/04/2020

Total Net Assets [further-information] £1,905.15 million
Market Capitalisation [further-information] £1,691.24 million
No of shares in issue 241,950,872
Net Gearing [further-information] 0.7%
Benchmark {{overview.quickFacts.benchmark}}
Ticker {{overview.quickFacts.ticker}}
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SEDOL {{overview.quickFacts.SEDOL}}

ChargesAs of 30/04/2020

Ongoing Charge [further-information] 1.02%

Key dates

Launch Date {{overview.keyDates.launchDate}}
Financial Year End 31 March
Next AGM July 2020
Stock exchange announcements

Management


Investment strategy

As pioneers in emerging market equity investing, the Templeton Emerging Markets Group use their expertise, experience and local country knowledge to help them uncover emerging market companies with the potential to grow in value over the long-term.

Find out more

Risks

Like all stock market investments, you take the risk that the companies, currencies and markets that TEMIT invests in do not perform as expected. Emerging markets can be subject to significant and rapid changes in value, particularly in the short-term, so the value of your investment can rise and fall accordingly. It could mean you may get back less than you invested. Although you are free to decide at any time when to sell shares in TEMIT, you should consider it a long-term investment.

Past performance is not a guarantee or an indicator of future performance.

The companies in which TEMIT invests are, by reason of the locations in which they operate, exposed to the risk of a lack of established legal, political, business and social frameworks to support a securities markets or the imposition of trade barriers and exchange controls. They may make it difficult to sell investments or result in price changes. It may not always be possible to sell shares in investment companies such as TEMIT.

There is no guarantee that TEMIT will achieve its objective.

TEMIT can borrow money to purchase additional investments (gearing). This can increase the risk to your investment if the cost of the gearing exceeds the investment return from it.

These and other risk considerations are covered in TEMIT's annual report.

We are unable to provide any advice about TEMIT's suitability for your personal circumstances. If you are in any doubt you should speak to a professional financial adviser.

10 largest holdings As of {{portfolio.holdings.asOfDate}}

Security% of portfolio
SAMSUNG ELECTRONICS CO LTD 7.0268%
TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD 6.9485%
NASPERS LTD 6.1070%
ALIBABA GROUP HOLDING LTD 5.5421%
ICICI BANK LTD 3.8199%
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LTD 3.3029%
UNILEVER PLC 3.0693%
TENCENT HOLDINGS LTD 3.0251%
LUKOIL PJSC 2.5616%
NAVER CORP 2.5132%


Portfolio Details

Sector breakdown As of 30/04/2020

SectorPercMSCI Emerging Markets Index (BM0119)
Information Technology 24.07 16.98
Communication Services 20.52 13.00
Consumer Discretionary 19.06 15.30
Financials 18.91 20.93
Consumer Staples 5.42 6.58
Energy 4.90 6.15
Materials 3.75 7.02
Industrials 2.10 5.01
Health Care 1.74 3.66
Real Estate 0.00 2.82
Utilities 0.00 2.55
Cash & Cash Equivalents -0.47 0.00

Country weightings As of 30/04/2020

CountryTEMITBenchmark
Hong Kong / China / Macao 33.50 39.63
South Korea 17.97 11.74
Taiwan 11.92 12.86
Russia 7.76 3.34
India 6.48 8.36
Brazil 6.46 4.73
South Africa 3.10 3.77
United Kingdom 3.01 0.00
United States 2.42 0.00
Thailand 2.02 2.32
Rest of the world 5.82 13.24
Cash & Cash Equivalents -0.47 0.00

GEARING

TEMIT has the ability to borrow money for investment purposes. The Board has agreed that the Company may borrow up to 10% of its net assets.

Net Gearing: 0.7% as at 30/04/2020

Market capitalisation As at 30 April 2020

<2.0 Billion 7.74%
2.0-5.0 Billion 8.70%
5.0-10.0 Billion 11.36%
10.0-25.0 Billion 10.29%
25.0-50.0 Billion 16.13%
>50.0 Billion 45.78%

Portfolio Characteristics As at 30 April 2020

Number of Holdings 80
Dividend Yield (i) [further-information] 2.84%
Price to Earnings (i) [further-information] 12.88
Price to Cashflow (i) [further-information] 6.46
Price to Book (i) [further-information] 1.55
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 131.33

Performance

The prices of shares and income from them can go down as well as up, and investors may not get back the full amount invested. Past performance is not a guarantee or indicator of future performance. Currency fluctuation may affect the value of overseas investments. In emerging markets, the risks can be greater than in developed markets An investment in TEMIT entails risks which are described in the annual report.


Discrete Performance to the end of the last month

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Quarterly Commentary (as of 31 March 2020)

Stocks worldwide tumbled in a volatile quarter, with emerging market (EM) equities falling more than their developed market counterparts. The escalation of the COVID-19 virus into a global pandemic hurt large segments of the world economy and fanned recession fears.

Asian equities endured a sell-off as investors counted the costs of travel restrictions, supply chain disruptions and weaker demand. Policymakers in the region unveiled fiscal support, interest-rate cuts and other relief measures. China's stock market showed strong resilience over the quarter, reducing much of its initial losses as the country appeared to contain the virus and economic activity seemed to improve. South Korea also showed progress in slowing the virus' spread. Several other markets confronted a jump in infections. Stocks in India slid as the government ordered a nationwide lockdown.

The contagion’s impact on global economies and commodity prices weighed heavily on Latin American stocks and currencies. Oil prices plunged amidst softer demand and the collapse of a supply pact amongst major oil producers, with Saudi Arabia cutting its official selling prices. Brazilian and Mexican stocks fell sharply. In Brazil, the government announced measures to support the economy, while the central bank lowered its key interest rate to a record low and injected liquidity into the banking system.

Markets in the Europe, Middle East and Africa region lost ground amidst the global equity rout. Falling oil prices further weighed on Russia’s stock market. Stocks in South Africa fell as it imposed a lockdown to slow the spread of the virus.

Portfolio Changes & Positioning

From a sector perspective, we added to investments in communication services and consumer discretionary. By market, we undertook purchases in South Korea, Brazil and India.

At the sector level, we conducted some sales in energy, information technology and industrials. Across markets, we reduced holdings in China, Taiwan and the United States.

Performance Attribution

In sector terms, stock selection across financials, health care and consumer discretionary limited relative returns. By market, an overweight in Russia, an underweight in China and stock selection in India drove relative weakness.

At the market level, stock selection in both South Africa and Hungary provided relative support, as did an off-benchmark exposure to the United Kingdom. By sector, relative performance was bolstered by an overweight in communication services, stock selection in materials, plus stock selection and an underweight in industrials.

Outlook

China appears to be containing the coronavirus domestically, while developed countries are focused on slowing its progress. Policymakers globally have unveiled massive monetary and fiscal packages, though the extent to which they can offset demand destruction remains to be seen.

We expect significant corporate earnings downgrades for 2020 in most EM countries and sectors, though we also anticipate significant earnings recoveries in the future, as the virus outbreak eventually passes. Stock valuations look more appealing to us than they have for some time, although we recognise that we are also likely to see volatility in earnings forecasts in the coming months.

We continue to assess the longer-term implications of the crisis, such as the potential impact on supply chains of key technology, health care and other products, and the degree to which end-customers are willing to pay more for greater security of supply. We are also seeking companies that could benefit from any permanent behavioural changes in society as technology adoption accelerates, in areas such as e-commerce and cloud computing.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 31.03.2020)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Tencent Communication Services China 0.77
Naver Communication Services South Korea 0.38
Unilever Consumer Staples United Kingdom 0.36
China Resources Cement Holdings Materials China 0.25
Taiwan Semiconductor Manufacturing Information Technology Taiwan 0.24

Largest Detractors to Performance [further-information] (3 months to 31.03.2020)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
ICICI Bank Financials India -0.92
Banco Bradesco Financials Brazil -0.64
Banco Santander Mexico Financials Mexico -0.63
Itau Unibanco Holding Financials Brazil -0.58
Lukoil Energy Russia -0.40

Largest Contributors to Performance [further-information] (3 months to 31.03.2020)

Sector

Total Effect (%)
Communication Services 0.86
Materials 0.58
Industrials 0.21
Real Estate 0.10
Utilities 0.7
Information Technology 0.5
Energy -0.17
Cash & Other Net Assets -0.18
Consumer Staples -0.22
Consumer Discretionary -0.50
Health Care -0.51

Country - Largest Contributors

Total Effect (%)
South Africa 0.96
United Kingdom 0.36
Hungary 0.15
Poland 0.12
Colombia 0.11

Country - Largest Detractors

Total Effect (%)
Hong Kong / China -0.91
Russia -0.79
India -0.59
Thailand -0.44
Mexico -0.42

Risks

Risk Statistics (As of 31.03.2020)

1 year3 years
Alpha [further-information] 5.89 1.86
Beta [further-information] 1.22 1.13
Annualised Downside Risk [further-information] 3.19 2.65
Information Ratio (Relative) [further-information] 0.46 0.37
R2 [further-information] 98.73 94.58
Sharpe Ratio [further-information] -0.58 0.00
Annualised Tracking Error [further-information] 4.28 4.06
Annualised Volatility [further-information] 20.33 15.77
Positive Months [further-information] 6 17
Negative Months [further-information] 6 19

Pricing overview As of {{pricing.asOfDate}}

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TEMIT Dividends (Paid or Declared)

Ex dividend datePay dateDividend per share
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