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Fund Profile

Templeton Emerging Markets 06 July 2022


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Templeton Emerging Markets. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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Templeton Emerging Markets (TEM) has a long track record going back over 30 years. Chetan Sehgal joined Franklin Templeton in 1995 and has been the lead portfolio manager since February 2018, and prior to that was co-manager from October 2015. Andrew Ness joined as the co-manager in September 2018. They are supported by a 60+ analyst team based in 14 key emerging market countries. The trust invests in emerging market stocks, with the managers taking a bottom-up stock selection approach. The team seek companies that offer quality growth over a five-year horizon that are trading at a discount to their intrinsic value. Chetan and Andrew run a fairly concentrated and high conviction 60-80 stock portfolio.

After Chetan and Andrew took over, TEM’s Performance beat the MSCI Emerging Market Index benchmark and the AIC Global Emerging Markets peer group average during the first two full calendar years in 2019 and 2020. 2021 started off reasonably well for the trust, but since the middle of the year, it faced very challenging conditions as China started to clamp down on large tech companies. Russia’s invasion of Ukraine added further woes to the portfolio at the start of 2022.

These events have led to a widening of discounts in the sector, and TEM now trades at a Discount of 13.9% (as at 10/06/2022, which is wider than the five-year average of 11.1%). The trust pays a semi-annual dividend, and the current historic yield is 2.6% at the time of writing. TEM has the ability to use gearing of up to 20%, but Chetan and Andrew, to date, have used little debt to enhance performance.

Analyst's View

TEM is an interesting proposition for investors looking for long-term capital growth. The team have a long track record in managing emerging market assets and has bedded in their investment process well with solid performances in the first couple of years. There are challenging conditions in the market at the time of writing, but we believe the team remain right to be unfazed since the Portfolio is aligned to key long-term secular growth themes in the emerging markets. These economies are rapidly digitalising, and we think TEM’s technology bias, especially towards semi-conductors, is a good setup as these chips become pervasive in daily life. TEM is also positioned for rising income levels and the inevitable consumerism that is taking hold.

The team see four challenges ahead: China’s zero COVID-19policy, the Russia/Ukraine war, Federal Reserve interest rate hikes and climate change. The hope for the first two is that they are short-lived and temporary. With regards to Federal Reserve rate hikes, the team point out that emerging markets are better positioned today than in previous rate hike cycles, and most key emerging market currencies have held their value in this hiking cycle to date. Meanwhile, the climate change challenge is one where the portfolio can align itself for positive change with investment opportunities being created in renewable energy and electrification.


  • A large and well-resourced team
  • Portfolio aligned to long-term secular growth themes
  • Pays a good dividend for a growth focused trust


  • Geopolitical tensions are high, makes EM regions especially vulnerable
  • High conviction positions could increase risk
  • Stubbornly wide discount
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2024 Kepler Income & Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for income & growth... Find out more

Fund History

17 Apr 2024 Pretty, pretty, pretty good
Do investment trusts really protect capital and income against inflation? Let's take a look…
27 Mar 2024 Seoul searching
South Korea is looking to tackle its ‘discount’ versus other Asian countries by introducing governance reforms, just like Japan's…
02 Feb 2024 Extra chips with that please
We take a closer look at the booming semiconductor sector and how investors can tap into its growth potential….
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
07 Dec 2023 Fund Analysis
TEM offers broad exposure to the growth potential in emerging markets…
20 Sep 2023 Five questions about emerging markets
We track key developments in the diverse emerging markets universe…
30 Mar 2023 Fund Analysis
TEM offers broad exposure to the growth potential in emerging markets...
03 Feb 2023 Room for cautious optimism in emerging markets?
A weaker dollar may mean a better 2023…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
10 Nov 2022 Light at the end of the tunnel
Our speakers struck an optimistic note this week as we considered the prospects for investors at the end of a difficult year…
10 Nov 2022 Slides and Audio: Templeton Emerging Markets
Download the presentation and listen to the audio from our webinar from 7 November...
13 Jul 2022 Ready player one
We wonder where, if anywhere, should investors look for returns after a tumultuous first half of the year…
06 Jul 2022 Fund Analysis
A tough year so far but well-positioned for future growth...
30 Oct 2019 Fund Analysis
TEM has seen a rebound in performance since a change of approach…
10 Oct 2018 Information overload
Our analysis shows the long term case for emerging markets remains largely unaffected by much of the negative newsflow surrounding the sector...
09 Oct 2018 Fund Analysis
Templeton Emerging Markets aims to maximise total returns over the long run with a value-based, bottom up approach...
22 Mar 2018 Fools rush in
The strong performance of emerging markets has seen investors flooding into ETFs, but the evidence shows that active managers produce far better results...
19 Jan 2018 Full steam ahead?
Jupiter Fund of Investment Trusts manager Richard Curling gives his view on the potential risks and rewards for the major equity regions around the world in 2018...
12 Jul 2017 Fund Analysis
A value focused investment trust which has historically performed better during periods when emerging market equities have rallied...
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