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 31/07/2019

Total Net Assets [further-information] £2,261.83million
Market Capitalisation [further-information] £2,037.48million
No of shares in issue 248,170,621
Net Gearing [further-information] 1.8%
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ChargesAs of 31/07/2019

Ongoing Charge [further-information] 1.02%

Key dates

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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 31/07/2019

SectorPercMSCI Emerging Markets Index (BM0119)
Financials 25.54 24.79
Consumer Discretionary 21.40 13.61
Information Technology 20.88 14.29
Communication Services 11.51 11.88
Energy 7.78 7.76
Consumer Staples 6.54 6.74
Materials 3.69 7.21
Industrials 2.48 5.31
Health Care 1.60 2.62
Real Estate 0.00 2.98
Utilities 0.00 2.83
Cash & Cash Equivalents -1.42 0.00

Country weightings As of 31/07/2019

CountryTEMITBenchmark
Hong Kong / China 25.32 31.77
South Korea 13.67 11.80
Brazil 10.35 8.05
Taiwan 9.75 11.18
Russia 9.41 4.02
India 7.55 8.62
South Africa 6.80 5.82
Thailand 3.48 2.97
United Kingdom 3.07 0.00
United States 3.09 0.00
Rest of the world 8.94 15.77
Cash & Cash Equivalents -1.42 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: 1.8% as at 31/07/2019

Market capitalisationAs at {{portfolio.marketCap.asOfDate}}

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Market breakdown [further-information] As at 31 July 2019

Emerging 92.9%
Frontier 2.4%
Developed 6.2%
Total 101.4%

Portfolio Characteristics As at 31 July 2019

Number of Holdings 93
Dividend Yield (i) [further-information] 2.86%
Price to Earnings (i) [further-information] 11.74
Price to Cashflow (i) [further-information] 7.16
Price to Book (i) [further-information] 1.64
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 90.39

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

12 months to31st July 201931st July 201831st July 201731st July 201631st July 2015
Share price +16.4% +2.7% +30.4% +22.6% -18.6%
NAV +12.2% +1.9% +32.7% +21.9% -17.3%
MSCI Emerging Market Index +5.2% +5.3% +26.2% +17.1% -6.0%

Cumulative performance as at 31st July 2019

Performance to3 monthsYear to date3 year5 years10 years
Share price +6.4% +16.4% +55.9% +55.6% +136.6%
NAV +6.6% +12.2% +51.7% +53.0% +137.7%
MSCI Emerging Market Index +3.8% +5.2% +39.8% +53.9% +118.8%

Monthly Commentary (as of 31 July 2019)

Emerging market (EM) equities declined in local currency terms in July, while developed market stocks advanced. Market sentiment was largely unsteady amidst persistent global trade tensions, a weaker outlook for world economic growth and shifting expectations for the size of a potential US interest rate cut.

Lingering uncertainty around US-China trade relations and a slowdown in China's economy formed a muted backdrop for Asian markets. Stocks in South Korea fell as its trade disputes with Japan and North Korea's missile launches fuelled investor caution. India’s market declined as the country’s budget disappointed investors In contrast, Taiwan's index rose on strength in technology heavyweights.

Within Latin America, Brazil’s market was the top performer. The central bank cut its benchmark interest rate to a record low, raising expectations for another rate reduction in September. Meanwhile in Mexico, the resignation of the finance minister, concerns about state-owned oil company Pemex’s business plan and weak economic growth weighed on equities.

In the Europe, Middle East and Africa region, equities in Russia benefitted from an interest rate cut by the central bank. In South Africa, concerns about the country’s budget deficit took centre stage as the government announced a bailout for state-owned power utility Eskom.

Portfolio Changes & Positioning

Our investments in the materials sector increased. From a market perspective, we added to holdings in Brazil, Mexico and India.

We conducted some sales in information technology, consumer staples and consumer discretionary and in China, Peru and the United States from a market perspective.

Performance Attribution

In sector terms, stock selection in consumer discretionary and communication services boosted relative returns, as did an overweight to information technology. By market, South Korea, Taiwan and China were relative contributors, all due to stock selection.

By sector, relative returns were capped by stock selection in both consumer staples and industrials, as well as a lack of exposure to utilities. At the market level, stock selection in Indonesia and Brazil, as well as a lack of exposure to the United Arab Emirates, were areas of relative weakness.

Outlook

We expect the US-China trade conflict to remain a major headwind and believe that investors should be prepared for market volatility as the two major powers continue to iron out outstanding differences.

However, we believe many good-quality companies can still be found in EMs, where macroeconomic fundamentals remain largely healthy.

The expansion of the middle class has been one of the most influential demographic changes in EMs and has underpinned much of the growth in these economies. Technology also remains an integral part of the EM story. It has made an impact across many parts of the economy, and we continue to see companies using technology and innovation to drive growth and earnings.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 30.06.2019)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Gazprom Energy Russia 0.54
Brilliance China Automotive LTD Consumer Discretionary Hong Kong / China 0.38
ICICI Bank Financials India 0.33
Sberbank of Russia Financials Russia 0.33
Unilever Consumer Staples United Kingdom 0.30

Largest Detractors to Performance [further-information] (3 months to 30.06.2019)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
Glenmark Pharmaceuticals Health Care India -0.28
Cognizant Technology Solutions Information Technology United States -0.22
Massmart Holdings Consumer Staples South Africa -0.18
MCB Bank Financials Pakistan -0.16
Naver Information Technology South Korea -0.16

Largest Contributors to Performance [further-information] (3 months to 30.06.2019)

Sector

Total Effect (%)
Financials 1.09
Energy 0.48
Information Technology 0.24
Consumer Discretionary 0.22
Cash & Other Net Assets 0.20
Materials 0.14
Real Estate 0.06
Communication Services -0.05
Consumer Staples -0.06
Utilities -0.07
Industrials -0.13

Country - Largest Contributors

Total Effect (%)
China / Hong Kong 1.39
Russia 0.74
United Kingdom 0.29
Brazil 0.23
Mexico 0.21

Country - Largest Detractors

Total Effect (%)
United States -0.36
Taiwan -0.24
Indonesia -0.17
Pakistan -0.16
South Africa -0.16

Risks

Risk Statistics (As of 30.06.2019)

1 year3 years
Alpha [further-information] - 4.02 2.41
Beta [further-information] 1.14 1.03
Annualised Downside Risk [further-information] 1.11 2.27
Information Ratio (Relative) [further-information] 1.31 0.78
R2 [further-information] 95.77 91.50
Sharpe Ratio [further-information] 0.62 1.16
Annualised Tracking Error [further-information] 3.61 3.90
Annualised Volatility [further-information] 15.07 13.31
Positive Months [further-information] 6 21
Negative Months [further-information] 6 15

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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