Portfolio And Performance

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As of

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 31/10/2020

Total Net Assets [further-information] £2,260.09 million
Market Capitalisation [further-information] £2,007.63 million
No of shares in issue 236,470,286
Net Gearing [further-information] 0.1%
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ChargesAs of 31/10/2020

Ongoing Charge [further-information] 0.99%

Key dates

Launch Date 12 June 1989
Financial Year End 31 March
Half-Year End 30 September
Annual Report Published June
Half-Yearly Report Published November
AGM July
Potential Interim Dividend Ex-D Date (for 2020 H-Y Report) December 2020
Potential Interim Dividend Record Date (for 2020 H-Y Report) December 2020
Potential Interim Payment Date (for 2020 H-Y Report) January 2021
Potential Final Dividend Ex-D Date (for 2021 Annual Report) June 2021
Potential Final Dividend Record Date (for 2021 Annual Report) June 2021
Potential Final Dividend Payment Date (for 2021 Annual Report) July 2021
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 31/10/2020

SectorPercMSCI Emerging Markets Index (BM2658)
Information Technology 27.19 18.39
Consumer Discretionary 21.66 20.89
Communication Services 20.72 13.24
Financials 16.39 17.06
Consumer Staples 4.82 5.87
Materials 3.47 6.87
Energy 2.90 4.93
Industrials 2.23 4.30
Health Care 0.81 4.26
Real Estate 0.00 2.27
Utilities 0.00 1.91
Cash & Cash Equivalents -0.20 0.00

Country weightings As of 31/10/2020

CountryTEMITBenchmark (BM2658)
Hong Kong / China / Macao 34.99 43.23
South Korea 19.11 11.90
Taiwan 14.69 12.67
Russia 5.77 2.67
Brazil 5.56 4.39
India 5.27 8.15
South Africa 3.63 3.48
United Kingdom 2.62 0.00
United States 2.11 0.00
Thailand 1.57 1.69
Rest of the world 5.01 11.81
Cash & Cash Equivalents -0.20 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: 0.1% as at 31/10/2020

Market capitalisation As at 31 October 2020

<2.0 Billion 6.25%
2.0-5.0 Billion 6.33%
5.0-10.0 Billion 7.37%
10.0-25.0 Billion 7.65%
25.0-50.0 Billion 21.08%
>50.0 Billion 51.33%

Portfolio Characteristics As at 31 October 2020

Number of Holdings 84
Dividend Yield (i) [further-information] 2.73%
Price to Earnings (i) [further-information] 15.36
Price to Cashflow (i) [further-information] 6.05
Price to Book (i) [further-information] 1.63
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 203.65

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 OCTOBER 2020)

Overview

Emerging market (EM) equities finished a volatile month higher, while developed market stocks declined. Recovering economic momentum in emerging Asia cushioned EMs’ performance against renewed recession fears in Europe as mounting COVID-19 infections pushed several countries back into lockdowns. Rising coronavirus cases in the United States, plus uncertainty around additional fiscal stimulus and the presidential election, also drove market caution. The MSCI Emerging Markets Index gained 2.1%, while the MSCI World Index fell by 3.1%, both in sterling terms. Emerging Asian equities defied market declines globally to deliver gains. Stocks in China rose as its economic pick-up gained pace. Taiwan’s market advanced with technology related stocks proving to be resilient. Latin American equities fell. Brazil’s market pulled back in sterling terms, with the Brazilian real’s weakness widening a dip in local-currency terms. Conversely, Mexican equities rose in sterling terms as the Mexican peso’s appreciation erased local-currency losses. Emerging European markets pulled back as a fresh wave of COVID-19 infections in Europe brought on tighter mobility restrictions. A faltering outlook for economic momentum and energy demand drove oil prices lower. Against this backdrop, Russian equities fell. In the Middle East and Africa region, South African stocks gained in sterling terms.

Portfolio Changes & Positioning

We added to some existing positions, including South Korea-based semiconductor and consumer electronics company Samsung Electronics. Overall, we increased investments in information technology, materials, and financials by sector. By market, we undertook purchases in South Korea, Taiwan, and the United States (represented by IMAX, a US-listed entertainment technology company with significant exposure to EMs). Repurchases of TEMIT’s own shares also occurred.
Amongst holdings that we trimmed was Unilever. As a whole, we reduced positions in consumer staples and communication services at the sector level, and in Russia, China, and the United Kingdom (Unilever) at the market level.

Performance Attribution

Key stock detractors from TEMIT’s performance relative to the benchmark MSCI Emerging Markets Index included Russian internet company Yandex, car maker Brilliance China Automotive, and Unilever.
Analysing by sector, consumer discretionary, communication services, and consumer staples capped relative returns, all due to stock selection. In market terms, stock selection in China, an overweight in Russia, and an off-benchmark position in the United Kingdom (Unilever) detracted from relative returns.
By sector, stock selection in financials, an underweight in energy, and a lack of exposure to real estate supported relative performance. At the market level, stock selection in both South Africa and India boosted relative returns, as did a lack of exposure to Saudi Arabia.

Outlook

We have seen increased differentiation within EMs amidst rapid changes brought about by various economic, social, and exogenous shocks such as the pandemic. EM equities have as a whole been resilient, although this masks wide divergences across countries and sectors. As a region, emerging Asia has outperformed. By industry, the narrow leadership of internet, technology, consumer and other “new economy” companies thriving amidst COVID-19 has been apparent.
Central to our approach is our philosophy of seeking companies that demonstrate sustainable earnings power, trading at discounts to our assessment of their intrinsic worth.
In our view, innovation and technology have been the driving forces behind EMs’ recovery amidst the COVID-19 fallout.
While developments from the US presidential election—and their potential impact on US-China relations—could spur market volatility, our focus remains on individual companies that could fare well over the longer run.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 30.09.2020)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Taiwan Semiconductor manufacturing co ltd Information Technology Taiwan 1.32
Alibaba Group holding ltd Consumer Discretionary China 0.53
Yandex NV Communication Services Russia 0.44
Samsung Life Insurance co ltd Consumer Discretionary South Korea 0.34
Cognizant Technology Solutions Corp Information Technology United Sates 0.16

Largest Detractors to Performance [further-information] (3 months to 30.09.2020)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
Lukoil Pjsc Energy Russia -0.44
Itau Unibanco Holding s/a Financials Brazil -0.31
Naspers Ltd Consumer Discretionary South Africa -0.23
Banco Bradesco SA Financials Brazil -0.21
Banco Santander Mexico SA IN Financials Mexico -0.20

Largest Contributors to Performance [further-information] (3 months to 30.09.2020)

Sector

Total Effect (%)
Information Technology 1.46
Communication Services 1.08
Financials 0.45
Utilities 0.30
Health Care 0.28
Industrials 0.24
Consumer Staples 0.23
Real Estate 0.21
Materials -0.01
Cash & Other Net Assets -0.04
Energy -0.38
Consumer Discretionary -1.51

Country - Largest Contributors

Total Effect (%)
Taiwan 1.61
South Korea 0.46
China 0.28
United States 0.17
Russia 0.17

Country - Largest Detractors

Total Effect (%)
Brazil -0.55
India -0.39
South Africa -0.11
Mexico -0.06
Cambodia -0.04

Risks

Risk Statistics (As of 30.09.2020)

1 year3 years
Alpha [further-information] 3.21 1.74
Beta [further-information] 1.17 1.13
Annualised Downside Risk [further-information] 3.55 2.70
Information Ratio (Relative) [further-information] 0.74 0.49
R2 [further-information] 96.35 94.55
Sharpe Ratio [further-information] 0.42 0.34
Annualised Tracking Error [further-information] 5.24 4.29
Annualised Volatility [further-information] 21.89 16.53
Positive Months [further-information] 8 20
Negative Months [further-information] 4 16

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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