Templeton Emerging Markets Investment Trust PLC (“TEMIT”)

For Professional investor use only. Not for distribution to retail investors.
Emerging Markets
GB0008829292
December 2017
Templeton Emerging Markets
Investment Trust PLC (TEMIT)
Quarterly Report
Performance
Performance over 5 Years in GBP (rebased to 100)
(Shaded area represents performance since Carlos Hardenberg became lead manager of TEMIT in October 2015)
Performance in Share Class Currency (%)
Cumulative Performance (%)
3 Mths1 Yr3 Yrs5 Yrs10 Yrs
Since
Incept
Share Price4.0132.2348.6642.2090.073,056.66^
Benchmark6.6225.8351.3451.3979.791,641.57^
NAV5.0630.5149.6845.8785.083,429.36†
Benchmark6.6225.8351.3451.3979.791,572.12†
Pastperformanceisnotanindicator
ora guaranteeoffutureperformance.
Thevalueofsharesin TEMITandincome
receivedfromit cangodownaswellas
up,andinvestorsmaynotgetbackthe
fullamountinvested.
PerformancedetailsareinTEMIT’sbasecurrency,
includethereinvesteddividendsnetofbasicrateUKtax
andarenetofmanagementfees. Saleschargesand
othercommissions,othertaxesandrelevantcoststobe
paidbyaninvestorarenotincludedinthecalculations.
Performancemayalsobeaffectedbycurrency
fluctuations. Uptodateperformancefigurescanbefound
onourwebsitewww.temit.co.uk
^ SharePrice-basedandIndexreturnsareshownfrom
9/07/89(firstavailabledate). †NAV-basedandIndex
returnsareshownfrom31/07/89(firstavailabledate).
UK FreefoneTelFaxE-MailWeb
0800 305 306+4420 7073 8690+4420 7073 8701enquiries@franklintempleton.co.ukwww.temit.co.uk
Company Overview
Base CurrencyGBP
Launch Date12.06.1989
BenchmarkMSCI Emerging Markets Index
Total Net Assets£2,439.30 million
Market Capitalisation£2,148.72 million
Net Gearing1.7%
Invested Assets101.3%
Ongoing Charges Ratio1.12%
Number of Shares in Issue275,653,232
ISA StatusYes
Investment Objective and Policy
TheCompanyseekslong-termcapitalappreciation
throughinvestmentincompanieslistedinemerging
marketsorcompanieswhichhavea significantamountof
theirrevenuesinemergingmarkets,butarelistedon
stockexchangesin developedcountries.
ItisintendedthattheCompanywillnormallyinvestin
equityinvestments. However,theInvestmentManager
mayinvestinequity-relatedinvestments(suchas
convertibles)wheretherearebelievedtobeadvantages
tosodoing.Theportfoliomayfrequentlybeoverweightor
underweightagainsttheMSCIEmergingMarketsIndex
andmaybeconcentratedina morelimitednumberof
sectors,geographicalareasorcountries. TheCompany
mayalsoinvesta significantportionofitsassetsinthe
securitiesofoneissuer,securitiesdomiciledina
particularcountry,orsecuritieswithinoneindustry.No
morethan10%oftheCompany’sassetswillbeinvested
inthesecuritiesofanyoneissueratthetimeof
investment.
TheBoardhasagreedthatTEMITmayborrowupto10%
ofitsnetassets.
Fund Management
Carlos Hardenberg (Lead Manager)London
Chetan Sehgal (Portfolio Manager)Singapore
Mark Mobius, PhD (Portfolio Manager)Hong Kong
Pricing Information
NAV (Cum-Income)884.92p
Ordinary Share Price779.50p
Discount (Cum-Income)-11.91%
Net Yield (% of NAV)0.93%
Dividends 8.25p per Ordinary Share
(paid July 2017)
Ratings
Morningstar
TM
Category:Global Emerging Markets
Equity
Morningstar
TM
Overall Rating:
What are the Key Risks?
ThevalueofsharesintheTempletonEmergingMarkets
InvestmentTrust(TEMIT)andanyincomereceivedfrom
itcangodownaswellasupandinvestorsmaynotget
backthefullamountinvested. Thereis noguaranteethat
TEMITwillmeetitsobjective.
TEMITinvestsintheequitysecuritiesofemerging
marketscompanies. Emergingmarketshavehistorically
beensubjecttosignificantpricemovements,oftentoa
greaterextentthanmoreestablishedequitymarkets. Asa
result,thesharepriceandnetassetvalueofTEMITcan
fluctuatesignificantlyoverrelativelyshorttimeperiods.
Othersignificantrisksincludeborrowingriskandshare
pricediscounttoNAVrisk. Formoredetailsofalltherisks
applicabletoTEMIT,pleaserefertotheKeyInformation
Document,InvestorDisclosureDocumentandtherisk
sectioninTEMIT’sAnnualReport,whichcanbe
downloadedfromourwebsite– www.temit.co.uk
Securities – Largest ContributorsSectorCountryTotal Effect (%)
Naspers Ltd
Consumer DiscretionarySouth Africa0.57
Bank DanamonIndonesia
FinancialsIndonesia0.36
ICICI Bank Ltd
FinancialsIndia0.20
Massmart Holdings Ltd
Consumer StaplesSouth Africa0.19
Ping An Insurance
FinancialsChina / Hong Kong0.17
Securities – Largest DetractorsSectorCountryTotal Effect (%)
GrupoFinancieroSantander MexicoFinancialsMexico-0.48
Brilliance China AutomotiveConsumer DiscretionaryChina / Hong Kong-0.40
UnileverConsumer StaplesUnited Kingdom-0.35
LojasAmericanasS.A.Consumer DiscretionaryBrazil-0.29
Mail.ru Group LtdInformation TechnologyRussia-0.27
Top10Holdings
LargestContributorsandDetractorstoPerformance(3 monthsto31.12.2017)
SecuritySectorCountry%of Total
Samsung ElectronicsInformation TechnologySouth Korea
8.1
Brilliance China Automotive Consumer DiscretionaryChina / Hong Kong
6.3
NaspersConsumer DiscretionarySouth Africa
5.7
Taiwan Semiconductor ManufacturingInformation TechnologyTaiwan
4.5
Alibaba, ADRInformation TechnologyChina / Hong Kong
4.0
TencentInformation TechnologyChina / Hong Kong
3.4
UnileverConsumer StaplesUnited Kingdom
3.2
Buenaventura, ADR Materials Peru
2.9
ICICI BankFinancialsIndia
2.5
Itaú Unibanco, ADR Financials Brazil
2.3
60
80
100
120
140
160
Dec-12Dec-13Dec-14Dec-15Dec-16Dec-17
TEMIT NAVTEMIT Share PriceMSCI Emerging Markets
Discrete Annual Performance (%)
Dec-16
Dec-17
Dec-15
Dec-16
Dec-14
Dec-15
Dec-13
Dec-14
Dec-12
Dec-13
Share Price32.2347.85-23.964.96-8.86
NAV30.5149.18-23.127.03-8.95
Benchmark25.8333.12-9.654.29-4.08

Templeton Emerging Markets Investment Trust PLC (TEMIT)
31 December 2017
For Professional investor use only. Not for distribution to retail investors.For Professional investor use only. Not for distribution to retail investors.For Professional investor use only. Not for distribution to retail investors.
www.temit.co.uk
SectorTEMITBenchmark+/-
Information Technology31.127.73.4
Financials22.823.5-0.6
Consumer Discretionary21.210.211.0
Consumer Staples7.16.60.6
Energy7.16.80.3
Materials5.87.4-1.6
Industrials3.15.2-2.2
Health Care1.92.7-0.8
Real Estate0.62.8-2.2
Telecommunication Services0.54.8-4.4
Utilities0.22.4-2.2
Cash & Cash Equivalents-1.30.0-1.3
INVESTMENTAPPROACH
TheinvestmentmanagementteamisledbyLeadPortfolioManagerCarlosHardenberg,ExecutiveVicePresidentandManagingDirector,TempletonEmergingMarketsGroup,working
alongsidePortfolioManagerChetanSehgal,ExecutiveVicePresidentandDirectorofGlobalEmergingMarkets/SmallCapStrategies,TempletonEmergingMarketsGroupandDr.Mark
Mobius,ExecutiveChairmanofTempletonEmergingMarketsGroup(alsoa portfoliomanager). Theteamusesin-depthcompanyresearchtofindsecuritiesin anyemergingmarketcountryor
industrysector,regardlessofcompanysize,thattheybelieveareundervaluedbythemarketbuthavethepotentialto increasein valueovertime.
Usinga time-testedinvestmentphilosophyanda long-termapproachtovalue-orientedinvesting,theinvestmentteamlookbeyondshort-termnews,noiseandemotiontoidentifythemost
compellinginvestmentopportunitiesavailable.
Shareholdersin TEMITshouldconsiderit asa long-termfinancialcommitment. Pleasereferto thelatestannualreportformoredetailsof therisksassociatedwithaninvestmentin TEMIT.
BOARDOFDIRECTORS
PaulManduca(Chairman)HamishN BuchanSimonJeffreysBeatriceHollond
DavidGrahamGregoryE Johnson
GLOSSARYOFTERMS
Alpha-Alphameasuresthedifferencebetweena portfolio'sactualreturnsanditsexpectedperformance,givenitslevelofrisk(asmeasuredbybeta). A positivealphameansthattheportfolio
hasoverperformed,a negativealphameanstheportfoliohasunderperformed; forexample,analphaof1.0 meanstheportfoliooutperformedthemarket1.0%.
Beta-Betais a measureofa portfolio'ssensitivitytomarketmovements. It measurestherelationshipbetweena portfolio'sexcessreturnoveraninvestmentin a risk-freeinvestmentsuchas
cashandtheexcessreturnofthebenchmarkindex. ForTEMIT,thisis theInvestmentTrustsGlobalEmergingMarketsUniverse.Bydefinition,thebetaofthebenchmark(inthiscase,an
index)is 1.00. Accordingly,a portfoliowitha 1.10betahasperformed10%better(afterdeductingthecashrate)thantheindexin upmarketsand10%worsein downmarkets,assumingall
otherfactorsremainconstant. A portfoliowitha highbetawilltendto movemorethanthebenchmark,a portfoliowitha lowbetawilltendtomoveless.
Contributor-Theamountanindividualstock,countryorsectorhasaddedto theperformanceof theentireportfoliofora givenperiod.
CumulativePerformance-Thepercentageincreaseordecreaseof a portfolio'ssharepriceorNAVovera giventimeperiod,withnetincome(dividends)reinvested.Thefund'sperformanceis
usuallybenchmarkedagainsteithera relevantindexorsector.
Detractor-Theamountanindividualstock,countryorsectorhassubtractedfromtheperformanceoftheentireportfoliofora givenperiod.
DiscreteAnnualPerformance-Thepercentageincreaseordecreaseofa portfolio'ssharepriceorNAVovera complete12monthperiod,withnetincome(dividends)reinvested.Thefund's
performanceis usuallybenchmarkedagainsteithera relevantindexorsector.
CountryTEMITBenchmark+/-
China / Hong Kong22.929.7-6.8
South Korea15.015.4-0.3
Taiwan9.811.3-1.4
Brazil8.76.81.9
Russia7.93.34.6
South Africa6.57.1-0.6
India5.78.8-3.1
Thailand5.12.32.9
Indonesia4.32.22.0
United Kingdom3.20.03.2
SectorTotal Effect (%)
Industrials0.24
Telecommunication Services0.18
Utilities0.15
Real Estate0.12
Cash & Other Net Assets0.06
Materials0.03
Energy-0.08
Consumer Discretionary-0.08
Health Care-0.21
Financials-0.30
Consumer Staples-0.53
Information Technology-0.72
Country – Largest ContributorsTotal Effect (%)
South Africa0.33
Indonesia0.30
Cambodia0.11
Thailand0.08
United Arab Emirates*0.08
Country – Largest DetractorsTotal Effect (%)
Brazil-0.89
United Kingdom-0.35
Taiwan-0.30
South Korea-0.26
Mexico-0.16
TEMITBenchmark
Price / Earnings14.8715.13
Price / Book1.921.79
Price / Cash Flow8.399.67
Dividend Yield2.17%2.21%
Weighted Average Market Capitalisation (millions)£74,633£62,683
1 Year3 Years
Alpha
4.43-0.86
Beta
0.971.05
Annualised Downside Risk
1.944.31
Information Ratio (Relative)
1.40-0.08
R
2
89.3690.42
Sharpe Ratio
2.970.81
Annualised Tracking Error
3.345.42
Annualised Volatility
10.2017.34
Positive Months
822
Negative Months
414
LargestContributors/Detractorsto Performance(3 monthsto 31.12.2017)LargestContributors/Detractorsto Performance(3 monthsto 31.12.2017)
SectorWeightingsv Benchmark(%)TenLargestCountryWeightingsv Benchmark(%)
RiskStatistics(asat31.12.2017)Fundamental Portfolio Characteristics (as at 31.12.2017)
Note: *No holdings in portfolio
Market Capitalisation Breakdown (%)
>25 Billion45.1
10-25 Billion15.1
2-10 Billion26.1
<2 Billion13.2
Not Classified0.5

Templeton Emerging Markets Investment Trust PLC (TEMIT)
31 December 2017
For Professional investor use only. Not for distribution to retail investors.For Professional investor use only. Not for distribution to retail investors.
GLOSSARYOFTERMS(continued)
DividendYield-Theyielda companypaysouttoitsshareholdersin theformofdividends. It is calculatedbythedividendspaidpershareovera yeardividedbythestock'sprice. Foravehicle
likeTEMIT,whichinvestsin a numberofcompanies,thisfigurerepresentstheweightedaverageannualdividendpaidbyallofthecompaniesin whichit invests.Becauseofsharetypes,fees
andotherconsiderations,thedividendyieldquotedhereshouldnotbeusedasanindicationof theincometo bereceivedfromthisportfolio.
DownsideRisk- Downsideriskis a measurementwhichonlyconsidersnegativereturns. It is calculatedasa downsidedeviationofreturnsbelowtheRiskFreeRate(thisis theamounta
managercouldexpecttoreceivebyinvestingin a “riskfree”asset,suchaswitha cashdeposit).
InformationRatio-ThisratiodividestheannualisedaveragereturnfortheportfoliobytheTrackingError(Relative). Thehighertheratio,thebetter,asit reflectstheextenttowhichaportfolio
hasoutperformedthebenchmark.
MarketCapitalisation-Thetotalmarketvalueofa company’sshares. Fora vehiclelikeTEMIT,whichinvestsin a numberof companies,thisis calculatedbythesharepriceona certaindate
multipliedbythenumberofsharesin issue.
MarketCap(average)-Theweightedaverageofallthecompaniesin whichit invests.
MaximumGain-Thebestpossibleinvestmentperiodin theperiodanalysed.Thisincludestemporarydownperiods.
MaximumLoss-Theworstpossibleinvestmentperiodin theperiodanalysed.Thisincludestemporaryupperiods.
NAV-NetAssetValue,orthetotalvalueoftheportfolioat anyonetime,includingallsharesandcash,dividedbythenumberof sharesin issue.
NetGearing(sometimesdescribedasleverage)- a termusedtodescribetheprocessofborrowingmoneyforinvestmentpurposesintheexpectationthatthereturnsontheinvestments
purchasedusingtheborrowingsexceedsthecostsofthoseborrowings. Forexample,a figureof5%meansthattheshareholderfundsare5%gearedandindicatestheextraamountbywhich
theshareholderfundswouldriseorfallif thetotalassetswereto riseorfall. A figureof 0%meansthereis nogearing.NetGearingis thegearinglevellessthelevelofcashin theportfolio.
OngoingChargesRatio(“OCR”)-Fromtheyearending31March2012, theOngoingChargesRatio(“OCR”)replacestheTotalExpenseRatio. Prioryearnumbershavenotbeenrestatedas
theratiosarenotmateriallydifferent. TheOCRrepresentstheannualisedongoingchargesoftheCompanydividedbytheaveragedailynetassetvaluesoftheCompanyfortheyear,andhas
beenpreparedin accordancewiththeAIC’srecommendedmethodology.
Positive& NegativePeriods-Thisshowshowmanypositive/negativemonthsreturnsthata portfolioexperiencesacrossa period.
PricetoBook(P/B)-Thepricepershareofa stockdividedbyitsbookvalue(i.e. networth)pershare. Fora portfolio,theratiois theweightedharmonicaverageprice/bookratioofthestocks
itholds.
PricetoCashFlow(P/CF)-Supplementsprice/earningsratioasa measureof relativevalue;it representsa weightedharmonicaverageof theprice/cashflowratiosfortheunderlyingportfolio
holdings.
PricetoEarnings(P/E)-Thesharepriceofa stock,dividedbyitsper-shareearningsoverthepastyear. Fora portfolio,it is theweightedharmonicaverageP/Eratioofthestocksinthe
portfolio. P/Eis a goodindicatorof marketexpectationsabouta company'sprospects; thehighertheP/E,thegreatertheexpectationsfora company'sfuturegrowthin earnings.
R
2
-R
2
orR squared,is anindicationofhowcloselyalignedtheportfolioandthebenchmarkindexare. R
2
rangesbetween0 and100, with0 indicatinga lotofdifferenceand100indicatinga
perfectmatch. A valueof70andupwardsgenerallysuggeststhata portfolio’sperformanceis verycloselylinkedtotheperformanceofthebenchmarkindex.
SharePrice- Thecostof a unitofownershipin a companyaspurchasedthroughthestockexchange.
SharpeRatio-SharpeRatiojudgeswhethertherelationshipbetweena portfolio'sriskanditsreturnis goodorbad. Theunderlyingassumptionis thata portfoliomanagercouldinvestina
risklessasset(suchascash),thereforethereturnoftheriskfreeassetis deductedfromtheannualisedaveragereturn. Thisnetreturnis thendividedbythetotalrisk(annualisedvolatility).The
highertheratiothebetterthereturnforinvestorsfortherisktaken.
TotalNetAssets-Thetotalvalueofa company’sshares. Fora vehiclelikeTEMIT,whichinvestsin a numberofcompanies,thisis calculatedbytheNetAssetValue(NAV)ona certaindate
multipliedbythenumberofsharesin issue.
TrackingError(Relative)-TrackingError(Relative)measureshowmuchthereturnoftheportfoliodeviatesfromthebenchmarkindex. Thelowerthetrackingerroroftheportfolio,themoreit
resemblesthebenchmarkin termsofriskandreturncharacteristics.
Trust-A Trust,orInvestmentTrust,is a closedendedvehicleinvestingin a widevarietyof underlyinginvestments. InvestmentTrustsaretradedin exactlythesamewayasanyotherequityon
theLondonStockExchange. Thepriceatwhichtheyaretraded(shareprice)dependsonthedemandforthesharesintheinvestmenttrustandis oftenata variancewiththevalueoftheir
underlyingholdings(orNAV).
Volatility-Thisis a statisticalmeasureof theamountofmovementin thepriceofa shareorportfolioovera givenperiodoftime. If a portfolio’ssharepricehardlymovesovertime,it is saidto
havea lowvolatility. Volatilityis a simplemeasureof theconsistencyofreturns.
IMPORTANTINFORMATION
ThepriceofsharesinTEMITandincomefromthemcangodownaswellasupandyoumaynotgetbackthefullamountthatyouinvested.Past
performanceisnotanindicatorora guaranteeoffutureperformance.
Currencyfluctuationswillaffectthevalueofoverseasinvestments. Investmentsinfundsdenominatedina currencyotherthansterling,yourperformancemayalsobeaffectedbycurrency
fluctuations. Inemergingmarkets,theriskscanbegreaterthanin developedmarkets.
Thisdocumentdoesnotconstituteorformpartofanofferforsharesoraninvitationtoapplyforshares. AninvestmentinTEMITentailsriskswhicharedescribedintheKeyInformation
Document,InvestorDisclosureDocumentandtherisksectioninTEMIT’sAnnualReport,whichcanbedownloadedfromourwebsite– www.temit.co.ukPleaseconsultyourprofessional
adviserbeforedecidingtoinvest.
Performancefiguresarenotbasedonauditedfinancialstatementsand,unlessindicatedotherwise,assumereinvestmentofinterestanddividends.
Datafromthirdpartysourcesmayhavebeenusedin itspreparationandFranklinTempletonInvestmentshasnotindependentlyverified,validatedorauditedsuchdata.
Referencesto particularindustries,sectorsorcompaniesareforgeneralinformationandarenotnecessarilyindicativeof a portfolio’sholdingat anyonetime.
Opinionsexpressedaretheauthor’satpublicationdateandtheyaresubjecttochangewithoutpriornotice. Giventherapidlychangingmarketenvironment,wedisclaimresponsibilityfor
updatingthismaterial.
Attribution-relateddataprovidedbyFactSetasat 31/12/2017. RelativeattributionreferstotheMSCIEmergingMarketsIndexin sterlingterms.
Referencestoindicesaremadeforcomparativepurposesonlyandareprovidedtorepresenttheinvestmentenvironmentexistingduringthetimeperiodsshown. Anindexis unmanagedand
onecannotinvestdirectlyin anindex. Theperformanceoftheindexdoesnotincludethedeductionof expensesanddoesnotrepresenttheperformanceof anyFranklinTempletonfund.
MSCImakesnoexpressorimpliedwarrantiesorrepresentationsandshallhavenoliabilitywhatsoeverwithrespecttoanyMSCIdatacontainedherein. TheMSCIdatamaynotbefurther
redistributedorusedasa basisforotherindicesoranysecuritiesorfinancialproducts. Thisreportis notapproved,reviewedorproducedbyMSCI.
©2018Morningstar,Inc. Allrightsreserved. Theinformationcontainedherein:(1) is proprietarytoMorningstar; (2) maynotbecopiedordistributed; and(3) is notwarrantedtobeaccurate,
completeortimely. NeitherMorningstarnoritscontentprovidersareresponsibleforanydamagesorlossesarisingfromanyuseof thisinformation.
Acopyofthelatestannualreportandhalf-yearlyreport,if publishedthereaftercanbefound,onourwebsite: www.temit.co.ukorcanbeobtained,freeofcharge,fromtheaddressbelow.For
moreinformation,UKinvestorsshouldcontact: FranklinTempletonInvestments,CannonPlace,78CannonStreet,LondonEC4N6HL. Telephone: 0800305306, Email:
enquiries@franklintempleton.co.uk.
IssuedbyFranklinTempletonInvestmentManagementLimited(FTIML). FTIMLis authorisedandregulatedbytheFinancialConductAuthority.
Franklin Templeton Investment Management Limited
Cannon Place, 78 Cannon Street,
London EC4N 6HL
0800 305 306
enquiries@franklintempleton.co.uk
www.temit.co.uk
Copyright © 2018Franklin Templeton Investments. All rights reserved.