Templeton Emerging Markets Investment Trust

LSE: TEM

Market Cap£1,729m

Last Close 148.6p

Launched in June 1989, TEMIT was one of the first emerging markets funds in the UK. The trust seeks long-term capital appreciation through investment in companies operating in emerging markets, or listed on the stock markets of such countries. This may include companies that have a significant amount of their revenues in emerging markets, but which are listed on stock exchanges in developed countries. Performance is benchmarked against the MSCI Emerging Markets Index.

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Investment summary

Templeton Emerging Markets Investment Trust (TEMIT) has experienced a difficult period of performance in recent quarters as investors have focused on the tough macroeconomic backdrop rather than on individual company fundamentals. However, managers Chetan Sehgal (lead manager) and Andrew Ness are confident in the long-term strategy of investing in companies with sustainable earnings power that are trading at a discount to their estimated intrinsic values. They believe emerging markets are under-owned and undervalued; hence, it is a compelling time to consider an allocation to the regions. The global asset allocation to emerging markets is 6.5% versus an 11.0% index weighting, which has declined by 40% over the last 10 years. Also, in aggregate, the valuation of emerging market shares is almost at a historic low discount to those in developed markets, while they are very inexpensive compared with their own history.