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 31/03/2021

Total Net Assets [further-information] £2,588.70 million
Market Capitalisation [further-information] £2,390.81 million
No of shares in issue 236,245,731
Net Gearing [further-information] 0.5%
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ChargesAs of 31/03/2021

Ongoing Charge [further-information] 0.97%

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 31/03/2021

SectorPercMSCI Emerging Markets Index (BM2658)
Information Technology 31.31 20.92
Consumer Discretionary 18.96 17.65
Financials 18.78 18.24
Communication Services 16.73 11.74
Consumer Staples 4.44 5.63
Materials 3.53 8.08
Industrials 2.59 4.30
Energy 2.39 4.84
Health Care 1.22 4.46
Real Estate 0.48 2.15
Utilities 0.00 2.00

Country weightings As of 31/03/2021

CountryTEMITBenchmark (BM2658)
Hong Kong / China 29.73 37.91
South Korea 22.21 13.33
Taiwan 16.61 13.84
India 6.26 9.65
Russia 5.96 3.11
Brazil 5.83 4.46
South Africa 4.46 3.81
United Kingdom 2.10 0.00
Thailand 1.75 1.88
Mexico 1.30 1.74
Rest of the world 4.21 10.25
Cash & Cash Equivalents -0.41 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 31/03/2021

Market capitalisation As at 31 March 2021

<2.0 Billion 4.72%
2.0-5.0 Billion 8.77%
5.0-10.0 Billion 4.39%
10.0-25.0 Billion 9.79%
25.0-50.0 Billion 17.21%
>50.0 Billion 55.12%

Portfolio Characteristics As at 31 March 2021

Number of Holdings 80
Dividend Yield (i) [further-information] 1.82%
Price to Earnings (i) [further-information] 19.44
Price to Cashflow (i) [further-information] 7.11
Price to Book (i) [further-information] 2.10
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 194.78

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 Macrh 2021)

Overview

Emerging market (EM) equities rose over the first quarter of 2021 but lagged developed market stocks. The MSCI Emerging Markets Index gained 1.4%, while the MSCI World Index returned 4.1%, both in sterling terms.
Emerging Asian equities advanced. Taiwan’s technology-heavy index rallied as the economy benefitted from strong technology exports. Indian equities climbed.
Conversely, China’s market fell. Caution around monetary policy, stock valuations, US-China tensions, and increased regulatory scrutiny of Chinese internet firms overshadowed a continued economic recovery.
Latin American equities fell. Mexico’s central bank raised its economic growth forecast for the year, thanks in part to a stronger outlook for US industrial activity.
Markets across Europe, Middle East and Africa were mixed as investors weighed renewed contagion in certain countries against ongoing immunisation programmes. An upswing in oil prices buoyed Russian equities, although worries of potential US sanctions against Russia checked returns. South African stocks rallied on firmer commodity prices, the country’s vaccination drive, and a reopening economy.

Portfolio Changes & Positioning

We added to some existing holdings in the portfolio. Amongst new positions was India-based private health care services provider Apollo Hospitals Enterprise. As a whole, we increased investments in consumer discretionary, real estate, and financials at the sector level. In market terms, we undertook purchases in South Africa, India, and the United Kingdom (represented by global consumer goods giant Unilever, which generates more than half of its sales in EMs). Repurchases of TEMIT’s own shares also occurred.

Performance Attribution

Key stock contributors to TEMIT’s performance relative to the benchmark MSCI Emerging Markets Index included South Korean internet company Naver, chip maker Taiwan Semiconductor Manufacturing Company (TSMC), and Taiwan-based chip designer MediaTek.
Sectors that lifted relative returns included communication services, information technology, and consumer discretionary, all due to stock selection. At the market level, stock selection in China, Taiwan, and South Korea drove relative strength.
In contrast, major stock detractors from relative performance included Brazilian lender Itau Unibanco, car maker Brilliance China Automotive, and Unilever.
Weak investor sentiment towards Brazil weighed on Itau Unibanco. Mixed news held back Brilliance China. We continually assess the fundamentals and valuations of these holdings against our investment theses.
From a sector perspective, an underweight in materials was the main drag on relative returns.

Outlook

Fresh waves of COVID-19 infection have continued to test economies and health care systems globally, just as more countries step up the rollout of vaccines. Many EMs have remained less leveraged than developed economies at the sovereign, corporate and household levels. EM banking systems have largely withstood stress despite loan moratoriums. Technology and consumption have also become new drivers of economic growth for many EMs. Overall, we expect a sharp earnings rebound in EMs this year from a low base last year.
Reflationary expectations and higher US bond yields have stoked market volatility.
A long-term, stock-driven, and valuation-aware focus is central to our investment approach. We seek companies with sustainable earnings power, trading at discounts to our perception of their intrinsic worth. We have found many such companies operating in areas of secular growth related to technology and consumption. Of particular appeal to us are business models and management teams that display agility and resilience in a fast-c

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 31.03.2021)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Naver Corp Communication Services South Korea 0.76
Taiwan Semiconductor Manufacturing Co ltd Information Technology Taiwan 0.70
Mediatek Inc Information Technology Taiwan 0.43
Tencent Holdings Ltd Communication Services China 0.42
Kuaishou Technology Communication Services China 0.41

Largest Detractors to Performance [further-information] (3 months to 31.03.2021)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
Al Rajhi Bank Financials Saudi Arabia -0.10
China Construction Bank Financials China -0.07
Country Garden Services Holdings Co ltd Industrials China -0.06
Kakao Corp Communication Services South Korea -0.05
Impala Platinum Holdings ltd Materials South Africa -0.05

Largest Contributors to Performance [further-information] (3 months to 31.03.2021)

Information Technology1.23

Sector

Total Effect (%)
Communication Services 1.56
Information Technology 1.31
Consumer Discretionary 0.51
Health Care 0.43
Energy 0.31
Consumer Staples 0.31
Financials 0.08
Real Estate 0.04
Utilities 0.01
Industrials -0.02
Cash & Other Net Assets -0.21
Materials -0.31
Taiwan1.01

Country - Largest Contributors

Total Effect (%)
China 2.16
South Korea 0.67
South Africa 0.24
Thailand 0.19

Country - Largest Detractors

Total Effect (%)
Saudi Arabia -0.32
United Kingdom -0.17
Brazil -0.13
United States -0.09
Chile -0.07

Risks

Risk Statistics (As of 31.03.2021)

1 year3 years
Alpha [further-information] 10.51 3.25
Beta [further-information] 0.95 1.14
Annualised Downside Risk [further-information] 0.60 11.40
Information Ratio (Relative) [further-information] 2.68 0.99
R2 [further-information] 80.94 94.51
Sharpe Ratio [further-information] 5.56 0.68
Annualised Tracking Error [further-information] 4.30 4.33
Annualised Volatility [further-information] 9.78 16.56
Positive Months [further-information] 11 22
Negative Months [further-information] 1 14

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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