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 31/07/2020

Total Net Assets [further-information] £2,198.78 million
Market Capitalisation [further-information] £1,904.68 million
No of shares in issue 238,981,678
Net Gearing [further-information] 0.0%
Benchmark {{overview.quickFacts.benchmark}}
Ticker {{overview.quickFacts.ticker}}
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SEDOL {{overview.quickFacts.SEDOL}}

ChargesAs of 31/07/2020

Ongoing Charge [further-information] 0.99%

Key dates

Launch Date {{overview.keyDates.launchDate}}
Financial Year End 31 March
Next AGM July 2020
Final Dividend Ex-Date 11 June 2020
Final Dividend Record Date 12 June 2020
AGM 9 July 2020
Final Dividend Payment Date 17 July 2020
Half Year End 30 September 2020
Half Yearly Report Published November 2020
Interim Dividend Record Date December 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 31/07/2020

SectorPercMSCI Emerging Markets Index (BM2658)
Information Technology 25.38 18.33
Communication Services 21.00 13.08
Consumer Discretionary 20.05 18.03
Financials 16.67 18.10
Consumer Staples 4.90 6.37
Energy 3.66 5.70
Materials 3.49 6.99
Industrials 2.08 4.51
Health Care 1.15 4.27
Real Estate 0.00 2.45
Utilities 0.00 2.18
Cash & Cash Equivalents 1.62 0.00

Country weightings As of 31/07/2020

CountryTEMITBenchmark (BM2658)
Hong Kong / China / Macao 32.81 41.12
South Korea 18.36 11.48
Taiwan 13.02 13.01
Russia 7.30 2.99
Brazil 7.27 5.43
India 4.95 8.14
South Africa 3.08 3.68
United Kingdom 2.89 0.00
United States 1.92 0.00
Thailand 1.65 2.03
Rest of the world 5.12 12.12
Cash & Cash Equivalents 1.62 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: 0.0% as at 31/07/2020

Market capitalisation As at 31 July 2020

<2.0 Billion 5.79%
2.0-5.0 Billion 8.08%
5.0-10.0 Billion 8.95%
10.0-25.0 Billion 12.07%
25.0-50.0 Billion 16.28%
>50.0 Billion 48.83%

Portfolio Characteristics As at 31 July 2020

Number of Holdings 81
Dividend Yield (i) [further-information] 3.28%
Price to Earnings (i) [further-information] 15.35
Price to Cashflow (i) [further-information] 5.76
Price to Book (i) [further-information] 1.67
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 171.73

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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Cumulative performance as at {{performance.tables.cumulative.asof}}

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MONTHLY COMMENTARY (AS OF 31 AUGUST 2020)

Overview

Emerging market (EM) equities navigated a choppy month and finished behind developed market stocks. Investors welcomed improving economic data, encouraging news on potential COVID-19vaccines and treatments, and a new US monetary policy approach signalling an extended period of low interest rates. However, new clusters of COVID-19 infections and shaky US-China ties capped market sentiment. The MSCI Emerging Markets Index gained 0.2%, while the MSCI World Index returned 4.6%, both in sterling terms. Asian equities rose, aided by Chinese stocks’ advance. China and the United States pledged commitment to their trade deal, even as the US administration ordered fresh restrictions on Chinese technology companies. In India, equities gained as better-than-expected corporate earnings eclipsed an uptrend in COVID-19 cases. Conversely, Taiwanese stocks declined Latin American equities fell, with Brazil’s market recording a steep decline. Stocks in Mexico lost ground. The economy logged a sharp second-quarter contraction, and officials pared their economic forecasts for the year. In the Europe, Middle East and Africa region, South African equities fell amidst weakness in bank stocks. Stocks in Russia declined despite news of its progress in developing a COVID-19 vaccine, as investors eyed political unrest in neighbouring Belarus.

Portfolio Changes & Positioning

We added to some existing holdings and initiated a position in Taiwan-based semiconductor company Mediatek. As a whole, we increased investments in consumer discretionary and consumer staples at the sector level, and in South Africa, China, and Taiwan at the market level. Repurchases of TEMIT’s own shares also occurred. We trimmed some positions and divested India-based drug maker Glenmark Pharmaceuticals. Overall, we reduced investments in communication services, health care, and financials by sector, and in South Korea, Russia, and Hungary by market.

Performance Attribution

Key stock contributors to TEMIT’s performance relative to the benchmark MSCI Emerging Markets Index included Russian internet company Yandex, South Korea-based Samsung Life Insurance, and India-based ICICI Bank. Relative performance was bolstered by communication services, financials, and industrials in sector terms, and Russia, India, and South Africa in market terms, all due to stock selection. By sectors, stock selection in both consumer discretionary and materials, together with an overweight and stock selection in information technology, held back relative performance. By market, stock selection in China, plus an overweight and stock selection in Brazil, were the main drivers of relative weakness. South Korea detracted moderately.

Outlook

Mixed developments across the COVID-19, economic, and geopolitical fronts dominated investor sentiment in August. From a longer-term perspective, we are focused on three new realities in EMs. One is their increased institutional resilience. Second, the nature of emerging economies has changed. The third reality centres on innovation, and the notion of EMs “leapfrogging” the developed world in terms of infrastructure and business models. US actions against Chinese technology companies have undercut near-term investor confidence in the semiconductor and other related industries. However, we remain positive about longer-term technology demand, driven by growth in areas such as cloud applications and high-performance computing. We continue to seek quality companies with strong competitive advantages, exposures to areas of secular growth, and sources of sustainable earnings power.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 30.06.2020)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Naver Communication Services South Korea 1.35
Yandex Communication Services Russia 0.40
Tencent Communication Services China 0.37
Lojas Americanas Consumer Discretionary Brazil 0.36
Glenmark Pharmaceuticals Health Care India 0.33

Largest Detractors to Performance [further-information] (3 months to 30.06.2020)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
ICICI Bank Financials India -0.34
Unilever Consumer Staples United Kingdom -0.27
Brilliance China Automotive Consumer Discretionary China -0.23
Samsung Electronics Information Technology South Korea -0.22
China Resources Cement Materials China -0.21

Largest Contributors to Performance [further-information] (3 months to 30.06.2020)

Sector

Total Effect (%)
Communication Services 2.37
Cash & Other Net Assets 1.33
Financials 0.7
Real Estate 0.33
Utilities 0.17
Industrials 0.16
Consumer Discretionary 0.12
Energy -0.03
Consumer Staples -0.06
Information Technology -0.08
Health Care -0.33
Materials -0.53

Country - Largest Contributors

Total Effect (%)
South Korea 1.07
Russia 0.96
China 0.58
United States 0.21
Brazil 0.19

Country - Largest Detractors

Total Effect (%)
United Kingdom -0.31
South Africa -0.12
Thailand -0.12
Kenya -0.07
Philippines -0.07

Risks

Risk Statistics (As of 30.06.2020)

1 year3 years
Alpha [further-information] 4.79 2.38
Beta [further-information] 1.18 1.13
Annualised Downside Risk [further-information] 3.19 2.54
Information Ratio (Relative) [further-information] 0.88 0.64
R2 [further-information] 98.00 95.28
Sharpe Ratio [further-information] 0.15 0.36
Annualised Tracking Error [further-information] 4.71 4.14
Annualised Volatility [further-information] 22.57 17.05
Positive Months [further-information] 7 19
Negative Months [further-information] 5 17

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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