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 30/09/2019

Total Net Assets [further-information] £2,171.74 million
Market Capitalisation [further-information] £1,935.04 million
No of shares in issue 245,564,396
Net Gearing [further-information] 0.8%
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ChargesAs of 30/09/2019

Ongoing Charge [further-information] 1.02%

Key dates

Launch Date {{overview.keyDates.launchDate}}
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  30/09/2019

SectorPercMSCI Emerging Markets Index (BM0119)
Financials 24.53 24.69
Information Technology 22.01 15.07
Consumer Discretionary 17.96 13.05
Communication Services 14.36 11.57
Energy 7.40 7.67
Consumer Staples 6.04 6.90
Materials 4.10 7.36
Industrials 2.71 5.41
Health Care 1.50 2.60
Real Estate 0.00 2.86
Utilities 0.00 2.82
Cash & Cash Equivalents -0.60 0.00

Country weightings As of 30/09/2019

CountryTEMITBenchmark
Hong Kong / China 27.65 31.89
South Korea 15.45 12.15
Taiwan 10.33 11.48
Brazil 9.90 7.55
Russia 9.06 3.96
India 7.32 8.86
Thailand 3.14 2.91
United Kingdom 3.15 0.00
United States 3.18 0.00
South Africa 3.05 4.72
Rest of the world 8.37 15.03
Cash & Cash Equivalents -0.60 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: 0.8% as at 30/09/2019

Market capitalisationAs at 30 September 2019

<2.0 Billion 7.79%
2.0-5.0 Billion 10.40%
5.0-10.0 Billion 10.47%
10.0-25.0 Billion 9.46%
25.0-50.0 Billion 13.82%
>50.0 Billion 47.27%

Market breakdown [further-information] As at 30 September 2019

Emerging 92.2%
Frontier 2.1%
Developed 6.3%
Total 100.6%

Portfolio Characteristics As at 30 September 2019

Number of Holdings 91
Dividend Yield (i) [further-information] 2.95%
Price to Earnings (i) [further-information] 11.91
Price to Cashflow (i) [further-information] 6.39
Price to Book (i) [further-information] 1.63
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 97.15

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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Quarterly Commentary (as of 30 September 2019)

Stock markets worldwide weathered a volatile quarter amidst bumpy US-China trade negotiations and global recession fears. Central banks in several major markets, including the United States, cut interest rates to support economic activity. The MSCI Emerging Markets Index returned -1.0%, while the MSCI World Index returned 4.0%.

Most Asian markets finished the quarter lower. Chinese stocks fell as the US-China trade row remained in focus. Trade tensions aside, markets received a welcome surprise when China decided to remove investment quotas under two foreign investor programmes. In India, equities retreated as the economy's momentum faltered, though corporate tax cuts and other stimulus measures helped stem the decline. Bucking the regional downtrend, Taiwanese equities rose.

Stocks in Latin America declined. Argentina’s market tumbled amidst increased political and economic uncertainty.Brazilian equities fell but fared better than their regional peers. In Mexico, the central bank reduced its benchmark interest rate in view of weak domestic growth and lower inflation.

Markets in the Europe, Middle East and Africa region were mixed. Lower oil prices provided a challenging backdrop for Russia’s stock market, though an interest rate cut by the central bank helped underpin investor sentiment. In South Africa, economic concerns continued to weigh on the market.

Portfolio Changes & Positioning

In sector terms, purchases were concentrated in materials, industrials and health care. By market, we added to holdings in China, Brazil and South Korea.

Meanwhile, sectors in which we conducted some sales included information technology, consumer staples and financials. From a market perspective, we reduced holdings in South Africa, Cambodia and Peru.

Performance Attribution

At the sector level, an overweight to information technology lifted relative returns, as did stock selection in both consumer discretionary and communication services. By market, China, South Korea and Taiwan were relative contributors, all due to stock selection.

By sector, stock selection in consumer staples, industrials and health care hampered relative returns. At the market level, stock selection in Mexico and Russia drove relative weakness. Brazil was another relative detractor.

Outlook

The US-China trade conflict has continued to dominate market attention in recent months, with both governments imposing tariffs on each other’s goods. The impact of the trade war has not been limited to China; rather we have seen global implications.

Overall, slowing economic growth expectations, declining inflationary pressures and easing monetary policies in developed markets have generally led emerging markets’ central banks to turn more dovish. We expect this trend to continue, with potential rate cuts in markets such as Brazil, Russia and Mexico.

Amongst the portfolio’s top holdings are technology and consumer-related companies that are highly competitive and appear well-positioned to gain market share even in the face of macroeconomic challenges.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 30.09.2019)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Naver Communication Services South Korea 0.70
Taiwan Semiconductor Manufacturing Information Technology Taiwan 0.56
Sunny Optical Technology Group Information Technology Hong Kong / China 0.43
Brilliance China Automotive LTD Consumer Discretionary Hong Kong / China 0.40
Nagacorp Consumer Discretionary Hong Kong / China 0.36

Largest Detractors to Performance [further-information] (3 months to 30.09.2019)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
Banco Santander Maxico Financials Mexico -0.29
Massmart Holdings Consumer Staples South Africa -0.26
Banco Bradesco Financials Brazil -0.22
H & H International Holdings Consumer Staples Hong Kong / China -0.18
HDC Hyundai Development Financials South Korea -0.16

Largest Contributors to Performance [further-information] (3 months to 30.09.2019)

Sector

Total Effect (%)
Information Technology 1.17
Consumer Discretionary 0.92
Communication Services 0.63
Materials 0.49
Financials 0.24
Real Estate 0.14
Cash & Other Net Assets 0.00
Energy -0.00
Utilities -0.01
Health Care -0.01
Industrials -0.30

Country - Largest Contributors

Total Effect (%)
South Korea 0.94
China / Hong Kong 0.91
Taiwan 0.40
South Africa 0.38
Cambodia 0.36

Country - Largest Detractors

Total Effect (%)
Mexico -0.33
Russia -0.19
Brazil -0.10
Thailand -0.09
Indonesia -0.09

Risks

Risk Statistics (As of 30.09.2019)

1 year3 years
Alpha [further-information] 4.96 2.79
Beta [further-information] 1.19 1.04
Annualised Downside Risk [further-information] 1.08 1.98
Information Ratio (Relative) [further-information] 1.51 0.90
R2 [further-information] 97.01 92.69
Sharpe Ratio [further-information] 0.56 0.83
Annualised Tracking Error [further-information] 3.79 3.62
Annualised Volatility [further-information] 16.26 13.27
Positive Months [further-information] 7 20
Negative Months [further-information] 5 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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