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 30/06/2020

Total Net Assets [further-information] £2,122.58 million
Market Capitalisation [further-information] £1,862.35 million
No of shares in issue 239,994,107
Net Gearing [further-information] 0.0%
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Ticker {{overview.quickFacts.ticker}}
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ChargesAs of 30/06/2020

Ongoing Charge [further-information] 1.02%

Key dates

Launch Date {{overview.keyDates.launchDate}}
Financial Year End 31 March
Next AGM July 2020
Final Dividend Ex-Date 11 June 2020
Final Dividend Record Date 12 June 2020
AGM 9 July 2020
Final Dividend Payment Date 17 July 2020
Half Year End 30 September 2020
Half Yearly Report Published November 2020
Interim Dividend Record Date December 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 30/06/2020

SectorPercMSCI Emerging Markets Index (BM2658)
Information Technology 23.38 16.91
Communication Services 21.63 13.50
Consumer Discretionary 19.99 17.38
Financials 18.27 19.07
Consumer Staples 5.22 6.48
Energy 4.45 5.95
Materials 3.50 6.88
Industrials 2.22 4.69
Health Care 1.14 4.30
Real Estate 0.00 2.58
Utilities 0.00 2.27
Cash & Cash Equivalents 0.22 0.00

Country weightings As of 30/06/2020

CountryTEMITBenchmark (BM2658)
Hong Kong / China / Macao 33.50 40.95
South Korea 18.20 11.61
Taiwan 11.61 12.28
Russia 7.89 3.23
Brazil 7.29 5.14
India 5.26 8.02
South Africa 3.48 3.76
United Kingdom 3.02 0.00
Thailand 1.99 2.27
United States 1.84 0.00
Rest of the world 5.72 12.74
Cash & Cash Equivalents 0.22 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 30/06/2020

Market capitalisation As at 30 June 2020

<2.0 Billion 5.80%
2.0-5.0 Billion 8.72%
5.0-10.0 Billion 9.70%
10.0-25.0 Billion 12.96%
25.0-50.0 Billion 15.58%
>50.0 Billion 47.24%

Portfolio Characteristics As at June 2020

Number of Holdings 82
Dividend Yield (i) [further-information] 2.86%
Price to Earnings (i) [further-information] 13.56
Price to Cashflow (i) [further-information] 6.21
Price to Book (i) [further-information] 1.59
Weighted Average Market Capitalisation (i) (billion) [further-information] £ 150.97

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 30 JUNE 2020)

Overview

Emerging market equities rebounded in the second quarter, though they lagged developed market equities. A gradual rollback of coronavirus-induced lockdowns around the world, better-than-expected economic indicators, optimism around potential COVID-19 treatments, and widespread economic stimulus outweighed fears of second-wave outbreaks and renewed US-China tensions. Asian equities were buoyant. While geopolitical tensions and the pandemic have spurred discussion on deglobalisation, we believe many countries recognise the benefits of free trade and continue to seek trade deals, deepening their integration with others. Latin American markets joined the global rally, as investors looked past rising coronavirus infections and cuts to economic forecasts to focus on the reopening of economies and a pick-up in commodity prices. Markets in Europe, the Middle East and Africa registered a solid quarter. South African equities rallied on the gradual lifting of lockdown measures, better-than-expected first-quarter economic data, and fiscal and monetary easing measures. Russian equities were bolstered by higher oil prices, a strong appreciation in the ruble, and easing quarantine measures.

Portfolio Changes & Positioning

Overall, at the sector level, we added to holdings in consumer discretionary, we undertook some sales in health care, energy, and consumer staples. By market, investments in China, South Africa, and South Korea increased, we reduced holdings in India, Russia, and the United States (represented by US-listed Cognizant Technology Solutions, which derives much of its earnings from technology services provided in India). Repurchases of TEMIT’s own shares also occurred in the quarter.

Performance Attribution

Stock selection in both the communication services and financials sectors added to relative returns, as did a lack of exposure to real estate. In market terms, Russia, South Korea, and China drove relative strength, all aided by stock selection. From a sector perspective, stock selection in both materials and information technology, plus an underweight in health care, held back relative returns. By market, an off-benchmark exposure to the United Kingdom (Unilever) and stock selection across South Africa and Thailand were areas of relative weakness.

Outlook

With the slower spread of COVID-19 in recent months, policymakers and markets have begun to shift their focus from the immediate needs of the health crisis towards the economy. We have seen containment across developed and emerging markets, albeit with uneven progress, and economies globally have started to reopen.

We believe that the crisis has highlighted the strengths of emerging markets, whether in terms of their social, governance, and health care systems, or the fiscal and corporate reforms that they have undertaken over the last two decades. Robust balance sheets in many emerging markets have proven to be a source of resilience, and that could continue.

Before the full scale of the crisis became clear, the expectation was for China to deliver some of the largest fiscal and monetary stimulus amongst major economies. However, the developed world has turned out to be the biggest deployer of stimulus—far exceeding what we saw in the global financial crisis—and how this will eventually be repaid has yet to be determined.

We view geopolitical risks as part for the course for emerging market investors. While we continually factor these considerations into our investment decisions, of greater importance to us are company fundamentals and earnings sustainability, as well as the compelling combination of emerging market demographics and long-term growth potential.

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QUARTERLY PERFORMANCE ATTRIBUTION

Largest Contributors to Performance [further-information] (3 months to 30.06.2020)

Securities - Largest ContributorsSectorCountryTotal Effect (%)
Naver Communication Services South Korea 1.35
Yandex Communication Services Russia 0.40
Tencent Communication Services China 0.37
Lojas Americanas Consumer Discretionary Brazil 0.36
Glenmark Pharmaceuticals Health Care India 0.33

Largest Detractors to Performance [further-information] (3 months to 30.06.2020)

Securities - Largest DetractorsSectorCountryTotal Effect (%)
ICICI Bank Financials India -0.34
Unilever Consumer Staples United Kingdom -0.27
Brilliance China Automotive Consumer Discretionary China -0.23
Samsung Electronics Information Technology South Korea -0.22
China Resources Cement Materials China -0.21

Largest Contributors to Performance [further-information] (3 months to 30.06.2020)

Sector

Total Effect (%)
Communication Services 2.37
Cash & Other Net Assets 1.33
Financials 0.7
Real Estate 0.33
Utilities 0.17
Industrials 0.16
Consumer Discretionary 0.12
Energy -0.03
Consumer Staples -0.06
Information Technology -0.08
Health Care -0.33
Materials -0.53

Country - Largest Contributors

Total Effect (%)
South Korea 1.07
Russia 0.96
China 0.58
United States 0.21
Brazil 0.19

Country - Largest Detractors

Total Effect (%)
United Kingdom -0.31
South Africa -0.12
Thailand -0.12
Kenya -0.07
Philippines -0.07

Risks

Risk Statistics (As of 30.06.2020)

1 year3 years
Alpha [further-information] 4.79 2.38
Beta [further-information] 1.18 1.13
Annualised Downside Risk [further-information] 3.19 2.54
Information Ratio (Relative) [further-information] 0.88 0.64
R2 [further-information] 98.00 95.28
Sharpe Ratio [further-information] 0.15 0.36
Annualised Tracking Error [further-information] 4.71 4.14
Annualised Volatility [further-information] 22.57 17.05
Positive Months [further-information] 7 19
Negative Months [further-information] 5 17

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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