Getting more usually means paying more. But what if you could get twice as much – and pay less? That’s the unusual combination investing in emerging markets offers you today. Emerging market companies are expected to increase earnings by 50% this year – more than twice the rate forecast for US companies1.
Source: FactSet, MSCI, FactSet Market Aggregates.
Past performance is not a guide to future performance.
Yet emerging market shares are significantly cheaper than developed markets. And there could be another saving on top. Invest through Templeton Emerging Markets Investment Trust (TEMIT) and you can currently access those companies at a further discount to the value of the investments it holds.
Twice the growth. Lower valuations. And a potential second discount. So, what sits behind the numbers?
Company earnings are an important driver of long-term investment returns. And right now, emerging markets stand out. That reflects a much broader economic story.
Emerging markets already generate around two-thirds of global economic growth – a share that continues to rise2 – and are home to around 85% of the world’s population3. They also include some of the fastest-growing major economies. In fact, 23 out of 24 emerging markets are forecast to beat the UK’s growth rate in 20274.
Emerging markets are home to companies that already play major roles in the global economy.
These aren’t simply companies with potential for tomorrow. They’re already helping to shape the world around you today. With that combination of economic growth, innovation and global businesses, you might expect investors to pay a premium. Instead, the opposite is true.
Emerging market shares are more than 40% cheaper than developed markets5.
Trailing last 12 months to July 2026
Source: FactSet, MSCI. Past performance is not a guide to future performance. The chart compares the price-to-book value (ratio of share price over assets on the balance sheet) of emerging markets versus developed markets.
In other words, you’re paying less for access to fast-growing economies and businesses playing leading roles in global technology and innovation – at significantly lower valuations. The discount isn’t on the quality. It’s on the price you pay for it. And if you invest through TEMIT, you could benefit from another discount on top.
TEMIT currently trades at around a 7% discount to its net asset value (NAV)6. NAV is simply the total value of the investments held within the trust. That means you can currently buy exposure to £100 worth of underlying investments for around £93.
Why does this happen? Unlike other types of funds, an investment trust has its own share price, which can rise above or fall below the value of the investments it owns. When the share price is lower than the value of those investments, it is said to be trading at a discount.
That means you could currently benefit from two different layers of value: the lower valuations available across emerging markets themselves, and a further discount on the TEMIT share price.
Put these numbers together and they tell a striking story. Earnings growth of 50%, more than twice the US. Emerging market shares at valuations more than 40% cheaper than developed markets. And another potential discount through TEMIT.
But the most important point is what sits behind those numbers: fast-growing economies, increasingly important consumer markets and world-leading companies already helping to shape the future. When high growth, quality companies and lower prices come together like this, emerging markets offer a compelling combination.
If you’ve been waiting for a reason to consider emerging markets, this could be it.
Shares in TEMIT qualify as an investment which can be held through an ISA. TEMIT is available through a stocks and shares ISA from a number of different companies. Your financial adviser will be able to give you full details of the options available to you.
Footnotes
What are the key risks?
The value of shares in the Templeton Emerging Markets Investment Trust PLC (TEMIT) and any income received from it can go down as well as up and investors may not get back the full amount invested. There is no guarantee that TEMIT will meet its objective. TEMIT invests in equity securities of emerging markets companies. Emerging markets have historically been subject to significant price movements, often to a greater extent than more established equity markets. Performance may also be affected by currency fluctuations.
As a result, the share price and net asset value of TEMIT can fluctuate significantly over relatively short time periods. Other significant risks include borrowing risk, derivative instrument risk and share price discount to NAV risk. Past performance is not an indicator or a guarantee of future performance.
For more details of all the risks applicable to TEMIT, please refer to the Key Information Document, Investor Disclosure Document and the risk section in TEMIT’s Annual Report, which can be downloaded from our website www.temit.co.uk/resources/literature.
Important Information
This article is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares. Nothing in this document should be construed as investment advice. Opinions expressed are the author(s) at publication date and they are subject to change without prior notice.
Subscriptions to shares in TEMIT can only be made on the basis of the Investor Disclosure and Key Information Documents, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter.
Any research and analysis contained in this article has been procured by Franklin Templeton for its own purposes and is provided to you only incidentally. Data from third party sources may have been used in the preparation of this article and TEMIT has not independently verified, validated or audited such data. References to particular industries, sectors or companies are for general information and are not necessarily indicative of TEMIT’s holding at any one time. References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. Important data provider notices and terms are available at www.franklintempletondataresources.com.
