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 31/05/2019

Total Net Assets [further-information] £2,074.07million
Market Capitalisation [further-information] £1,864.40million
No of shares in issue 249,586,343
Net Gearing [further-information] 2.0%
Benchmark {{overview.quickFacts.benchmark}}
Ticker {{overview.quickFacts.ticker}}
ISIN {{overview.quickFacts.ISIN}}
SEDOL {{overview.quickFacts.SEDOL}}

ChargesAs of 31/05/2019

Ongoing Charge [further-information] 1.02%

Key dates

Launch Date {{overview.keyDates.launchDate}}
Financial Year End 31 March
Next AGM July 2019
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
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Portfolio Details

Sector breakdown As of 31/05/2019

SectorPercMSCI Emerging Markets Index (BM0119)
Financials 26.57 25.53
Information Technology 19.81 13.01
Consumer Discretionary 20.19 13.67
Communication Services 10.85 11.56
Energy 7.83 6.73
Consumer Staples 8.74 8.11
Materials 3.15 7.61
Industrials 2.77 5.38
Health Care 1.89 2.72
Real Estate 0.02 2.98
Utilities 0.00 2.69
Cash & Cash Equivalents -1.81 0.00

Country weightings As of 31/05/2019

CountryTEMITBenchmark
Hong Kong / China 23.81 31.11
South Korea 13.35 12.06
Brazil 9.17 10.99
Russia 9.91 3.99
Taiwan 9.89 7.60
India 6.97 5.92
South Africa 8.13 9.53
Thailand 3.97 2.89
United Kingdom 3.49 0.00
United States 0.7836 0.00
Rest of the world 9.78 15.91
Cash & Cash Equivalents -1.81 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: 2.0% as at 31/05/2019

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

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

Emerging 92.8%
Frontier 2.2%
Developed 6.8%
Total 101.8%

Portfolio Characteristics As at 31 May 2019

Number of Holdings 96
Dividend Yield (i) [further-information] 2.77%
Price to Earnings (i) [further-information] 10.69
Price to Cashflow (i) [further-information] 7.26
Price to Book (i) [further-information] 1.58
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 75.54

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 May 2019)

An unexpected spike in trade tensions and renewed global economic growth concerns in May caused emerging markets (EM) equities to post their weakest monthly performance of the year. EM stocks fell by more than their developed markets peers amidst capital outflows.

In Asia, Chinese equities tumbled as US-China trade tensions re-escalated. Bucking the regional downtrend, stocks in India rose.

Latin American stocks were collectively led higher by Brazil’s advance. Conversely, Mexican equities declined as US President Donald Trump proposed tariffs on all imports from Mexico.

Russia’s stock market was a standout performer in Emerging Europe. Within the Middle East and Africa region, South Africa’s market declined.

Portfolio Changes & Positioning

From a sector perspective, we undertook some purchases in information technology, energy and industrials. By market, we increased investments in China, Brazil and the United States. Repurchases of TEMIT’s own shares also occurred in the month.

We reduced holdings in real estate, financials and consumer staples sectors and Thailand, South Africa and the United Kingdom from a market perspective.

Performance Attribution

By sector, overweights to information technology and consumer discretionary as well as lack of exposure to utilities held back relative returns. Stock selection in both South Africa and Taiwan, together with a lack of exposure to Malaysia, contributed to relative weakness.

Across sectors, financials, energy and communication services boosted relative returns. In market terms, an underweight to China and an overweight to Russia drove relative strength. The United Kingdom was also a relative contributor

Outlook

We believe that the asset class still has significant potential, especially after the market falls last year and in May. We expect better corporate performance next year. We believe that 2020 could be a strong year for EM earnings based on cyclical recoveries that have started to emerge.

As long-term investors, we continue to seek companies in which we have confidence in management’s ability to deliver sustainable growth that we believe the market is mispricing.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 31.03.2019)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Brilliance China Automotive Holdings Ltd Consumer Discretionary Hong Kong / China 0.64
Ping An Bank Financials Hong Kong / China 0.39
Naspers Communication Services South Africa 0.36
Bank Danamon Indone SIA Consumer Discretionary Indonesia 0.30
Lukoil Holdings Energy Russia 0.25

Largest Detractors to Performance [further-information] (3 months to 31.03.2019)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
Astra International Consumer Discretionary Indonesia -0.25
Massmart Holdings Consumer Discretionary South Africa -0.23
Lojas Americanas Consumer Discretionary Brazil -0.22
Glenmark Pharmaceuticals Health Care India -0.16
Itau Unibanco Financials Brazil -0.15

Largest Contributors to Performance [further-information] (3 months to 31.03.2019)

Sector

Total Effect (%)
Financials 1.50
Information Technology 0.14
Consumer Discretionary 0.45
Communication Services 0.22
Energy 0.22
Consumer Staples 0.26
Materials -0.04
Health Care -0.12
Industrials 0.22
Real Estate -
Utilities 0.15
Cash & Other Net Assets 0.05

Country - Largest Contributors

Total Effect (%)
South Africa 0.60
South Korea 0.51
Russia 0.51
China / Hong Kong 0.25
Malaysia 0.23

Country - Largest Detractors

Total Effect (%)
Brazil -0.15
Hungary -0.10
Peru -0.09
Colombia -0.06
Pakistan -0.05

Risks

Risk Statistics (As of 31.03.2019)

1 year3 years
Alpha [further-information] 1.84 3.53
Beta [further-information] 1.10 1.03
Annualised Downside Risk [further-information] 2.30 2.27
Information Ratio (Relative) [further-information] 0.41 1.05
R2 [further-information] 90.93 92.46
Sharpe Ratio [further-information] 0.08 1.26
Annualised Tracking Error [further-information] 4.19 4.11
Annualised Volatility [further-information] 13.36 14.89
Positive Months [further-information] 5 21
Negative Months [further-information] 7 15

Pricing overview As of {{pricing.asOfDate}}

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Discount/Premium {{pricing.discount}}%


TEMIT Dividends (Paid or Declared)

Ex dividend datePay dateDividend per share
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