Templeton Emerging Markets Investment Trust PLC ""TEMIT")

For Professional investor use only. Not for distribution to retail investors.
Emerging Markets
GB0008829292
June 2018
Templeton Emerging Markets
Investment Trust PLC (TEMIT)
Quarterly Report
Performance
Performance over 5 Years in GBP (rebased to 100)
Performance in Share Class Currency (%)
Cumulative Performance to 30.06.2018 (%)
3 Mths1 Yr3 Yrs5 Yrs10 Yrs
Since
Incept
Share Price-3.706.0843.0137.1598.072,803.25^
Benchmark-2.096.8441.8149.3594.871,568.35^
NAV-3.125.9045.7040.01109.183,184.18†
Benchmark-2.096.8441.8149.3594.871,501.82†
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£2,134.39 million
Market Capitalisation£1,853.26 million
Net Gearing3.5%
Invested Assets104.7%
Ongoing Charges Ratio1.08%
Number of Shares in Issue264,373,100
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
Chetan Sehgal (Portfolio Manager)Singapore
Pricing Information
NAV (Cum-Income)807.34p
Ordinary Share Price701.00p
Discount (Cum-Income)-13.17%
Net Yield (% of NAV)1.86%
Dividends 15.00p per Ordinary
Share (paid July 2018)
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
Consumer DiscretionarySouth Africa
0.58
Uni-President China
Consumer StaplesChina
0.39
Unilever
Consumer StaplesUnited Kingdom
0.27
CNOOC
EnergyChina
0.25
IMAX
Consumer DiscretionaryUnited States
0.21
Securities – Largest DetractorsSectorCountryTotal Effect (%)
Hyundai Development Company
IndustrialsSouth Korea
-0.26
Brilliance China AutomotiveConsumer DiscretionaryChina / Hong Kong
-0.31
MassmartConsumer StaplesSouth Africa
-0.34
Banco BradescoFinancialsBrazil
-0.36
Itaú Unibanco
FinancialsBrazil
-0.39
Top10Holdings
LargestContributorsandDetractorstoPerformance(3 monthsto30.06.2018)
SecuritySectorCountry%of Total
Samsung Electronics Information Technology South Korea8.1
Naspers
Consumer Discretionary
South Africa7.3
Alibaba, ADR
Information Technology
China / Hong Kong 5.1
Taiwan Semiconductor Manufacturing
Information Technology
Taiwan5.0
Brilliance China Automotive
Consumer Discretionary
China / Hong Kong 4.9
Tencent
Information Technology
China / Hong Kong 3.6
Buenaventura, ADR
MaterialsPeru
3.1
Unilever
Consumer StaplesUnited Kingdom
3.0
ICICI Bank
FinancialsIndia
2.4
LUKOIL, ADR
EnergyRussia
2.4
70
90
110
130
150
Jun-13Jun-14Jun-15Jun-16Jun-17Jun-18
TEMIT NAVTEMIT Share PriceMSCI Emerging Markets
Discrete Annual Performance (%)
Jun-17
to Jun-18
Jun-16
to Jun-17
Jun-15
to Jun-16
Jun-14
to Jun-15
Jun-13
to Jun-14
Share Price6.0834.92-0.08-6.612.69
NAV5.9033.602.98-5.351.53
Benchmark6.8427.793.863.531.73

Templeton Emerging Markets Investment Trust PLC (TEMIT)
30 June 2018
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 Technology33.527.95.6
Financials22.822.80.0
Consumer Discretionary20.99.811.2
Energy8.47.21.2
Consumer Staples6.86.70.1
Materials5.97.6-1.7
Industrials2.55.2-2.7
Health Care1.83.2-1.4
Telecommunication Services1.34.3-3.0
Real Estate0.63.0-2.4
Utilities0.22.4-2.2
Cash & Cash Equivalents-4.70.0-4.7
INVESTMENTAPPROACH
Theinvestmentmanagementteamis ledbyLeadPortfolioManagerChetanSehgal,SeniorManagingDirectorandDirectorofPortfolioManagement,FranklinTempletonEmergingMarkets
Equity.
Theteamlookscloselyateachpotentialinvestmentandseekstoidentifythelifecycleofeachcompany'sproductsanddeterminetheimpactofgovernmentandregulatorychangesonthat
business,anditsmanagement'sstrategicthinkingoverthelongterm,toconfidentlyestimatewherea companymaybein fiveyears. Theteamseekstopurchasecompanieswithsustainable
earningsthatareavailableata discount,a characteristicoftenoverlookedbya marketthatfocusesintentlyonthenextquarterlyearnings. Stockselectiondrivestheteam’sportfolioinvestment
process,reflectingthemostcompellingopportunitiestheysee.
Shareholdersin TEMITshouldconsiderit asa long-termfinancialcommitment. Pleasereferto thelatestannualreportformoredetailsof therisksassociatedwithaninvestmentin TEMIT.
BOARDOFDIRECTORS
PaulManduca(Chairman)HamishN Buchan(retiredfromBoard12July2018)SimonJeffreysBeatriceHollond
David GrahamGregory E JohnsonCharlie Ricketts (appointed to Board 12 July 2018)
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 theMSCIEmergingMarketsIndex. Bydefinition,thebetaofthebenchmark(inthiscase,anindex)is 1.00.Accordingly,
aportfoliowitha 1.10betahasperformed10%better(afterdeductingthecashrate)thantheindexin upmarketsand10%worsein downmarkets,assumingallotherfactorsremainconstant.
Aportfoliowitha highbetawilltendtomovemorethanthebenchmark,a portfoliowitha lowbetawilltendto moveless.
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 Kong
25.532.7-7.2
South Korea
14.814.60.2
Taiwan
10.511.6-1.1
Russia
9.13.55.5
South Africa
8.06.61.4
Brazil
7.25.81.4
India
5.78.6-2.9
Thailand
4.42.22.2
Indonesia
3.71.91.8
Peru
3.50.43.0
SectorTotal Effect (%)
Energy0.64
Real Estate0.18
Telecommunication Services0.17
Industrials0.12
Consumer Discretionary0.06
Consumer Staples0.00
Health Care-0.02
Utilities-0.02
Cash & Other Net Assets-0.12
Materials-0.19
Information Technology-0.69
Financials-1.20
Country – Largest ContributorsTotal Effect (%)
South Africa0.74
United Kingdom0.27
Thailand0.23
United States0.21
Turkey0.18
Country – Largest DetractorsTotal Effect (%)
China/Hong Kong-0.17
Russia-0.30
India-0.35
Taiwan-0.47
Brazil-0.79
TEMITBenchmark
Price / Earnings12.3213.81
Price / Book1.721.68
Price / Cash Flow7.239.00
Dividend Yield2.45%2.58%
Weighted Average Market Capitalisation (millions)£78,788£59,516
1 Year3 Years
Alpha
-0.570.32
Beta
0.961.07
Annualised Downside Risk
2.823.75
Information Ratio (Relative)
-0.250.20
R
2
89.3591.91
Sharpe Ratio
0.480.76
Annualised Tracking Error
3.824.98
Annualised Volatility
11.6117.12
Positive Months
620
Negative Months
616
LargestContributors/Detractorsto Performance(3 monthsto 30.06.2018)LargestContributors/Detractorsto Performance(3 monthsto 30.06.2018)
SectorWeightingsv Benchmark(%)TenLargestCountryWeightingsv Benchmark(%)
RiskStatistics(asat30.06.2018)Fundamental Portfolio Characteristics (as at 30.06.2018)
Market Capitalisation Breakdown (%)
>25 Billion48.4
10-25 Billion13.6
2-10 Billion25.9
<2 Billion11.6
Not Classified0.5

Templeton Emerging Markets Investment Trust PLC (TEMIT)
30 June 2018
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.
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 30/06/2018. 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.