Templeton Emerging Markets Investment Trust PLC (“TEMIT”)

Markets Investment Trust PLC (“TEMIT” or “the Company”)
Unaudited Half Yearly Report to 30 September 2019
Legal Entity Identifier 5493002NMTB70RZBXO96


Company Overview

Launched in 1989, Templeton Emerging Markets Investment Trust PLC (“TEMIT” or the “Company”) is an investment company
that invests principally in emerging markets companies with the aim of delivering capital growth to shareholders over the long term.
While the majority of the Company’s shareholders are based in the UK, shares are quoted on both the London and New Zealand
Stock Exchanges.
The Company is governed by a Board of Directors who are committed to ensuring that shareholders’ best interests are at the forefront
of all decisions. Under the guidance of the Chairman, the Board of Directors is responsible for the overall strategy of the Company
and monitoring its performance. Only one member of the Board has a connection with Franklin Templeton Investments, with all
others being independent.
TEMIT’s research-driven investment approach and strong long-term performance has helped it to grow to be the largest emerging
markets investment trust in the UK, with net assets of £2.2 billion as at 30 September 2019.
TEMIT at a glance
For the six months to 30 September 2019
Net asset value total return
(cum-income)
(a)
6.3%
(2018: -1.5%)
Share price total return
(a)

4.4%
(2018: -2.2%)
MSCI Emerging Markets
Index total return
(a)(b)
2.2%
(2018: -1.8%)

Interim dividend for the
financial year 2020
5.00p
(Interim dividend for the
financial year 2019: 5.00p)
Special dividend
2.60p

Cumulative Total Return to 30 September 2019 (%)
6 Months 1 Year 3 Year 5 Year 10 Year
Net asset value (cum-
income)
6.3 9.8 38.7 51.0 101.2
Share Price 4.4 13.1 44.6 47.9 95.7
MSCI Emerging Markets
Index
2.2 4.1 26.9 50.4 87.1

(a)
A glossary of alternative performance measures is included in the full half-yearly report.
(b)
Source: MSCI. The Company’s benchmark is the MSCI Emerging Markets Index, with net dividends reinvested.

Chairman’s Statement

Market Overview and Investment Performance
Markets continued to be volatile in the period under review, with the continuing trade war between the US and China regularly
creating news headlines. Tension between the US and China repeatedly escalates and then is partially defused, a situation which is
not conducive to economic growth or investment returns. There is increasing evidence that this is affecting economic growth in both
countries and around the world. Reflecting difficult economic circumstances, the US Federal Reserve cut key interest rates twice.
This should help alleviate the recent strength of the US dollar, which has been a headwind for emerging markets, and reduce the
cost of debt in some countries.
Against this background I am again pleased to be able to report both a positive Net Asset Value Total Return and a return in excess
of that of our benchmark for the six months under review. I do recognise, however, that this positive return shows a snapshot of
values at two dates and must be viewed against the background of volatile markets.
Revenue, Earnings and Dividend
An interim dividend of 5.00 pence per share will be paid on 15 January 2020. TEMIT generally receives most of its income in the
first half of its accounting year and the interim dividend is fully covered by net income over the six months under review. Revenues
for the period included a special dividend amounting to £6.4 million from Brilliance China Automotive. The Board has elected to
pay an additional special dividend of 2.60 pence per share (being the amount received from Brilliance China Automotive) also on
15 January 2020, making total dividends to be paid on that date 7.60 pence per share.
While the Board recognises that dividends are appreciated by many shareholders, the Company’s investment strategy and the
Investment Manager’s approach to investment is focused on generating capital returns and we do not target a particular level of
income.
Asset Allocation and Borrowing
As at 30 September 2019, the current bank debt facility was partly drawn down and the level of gearing
(a)
(net of cash in the portfolio)
was 0.8%. If no cash had been held in the portfolio, based on the net asset value as at close of business on 30 September 2019,
gearing would have been 5.4%.
The current bank facility will expire on 31 January 2020 and the Board is currently reviewing options for continued gearing. A
further announcement will be made in due course.
The Discount
During the half year to 30 September 2019, TEMIT’s shares traded at discounts of between 8.8% and 11.7% and as at the end of
September the discount stood at 10.9%.
The Board exercises its powers to buy back shares when it believes this to be in shareholders’ interests and with the aim of
reducing volatility in the discount. The Company continues to be active in buying back shares, with shares bought back on the
majority of business days and a total of 5,851,774 shares being bought back over the six months under review at a cost of £45.8
million. As the share buybacks were carried out at discounts to the prevailing net asset value, this was beneficial to continuing
shareholders and improved the NAV
(a)
per share by 0.2%.
(a)
A glossary of alternative performance measures is included in the full half-yearly report.

The Board and Franklin Templeton remain committed to seeking to stimulate demand for TEMIT’s shares. In recent years we have
enhanced our marketing and media relations programme and this has helped to generate renewed interest in the shares.
Continuation Vote and Conditional Tender Offer
The continuation vote at this year’s Annual General Meeting was passed by a large majority and the Board and Franklin Templeton
are grateful for shareholders’ continuing support.
As set out in the most recent Annual Report, as shareholders voted in favour of continuation at this year’s Annual General Meeting,
the Board has introduced a five-year performance-related conditional tender offer. There will be no tender offer in the event that the
Company’s net asset value total return continues to exceed the benchmark total return. However, if, over the five-year period to 31
March 2024, the Company’s net asset value total return fails to exceed the benchmark total return, the Board will put forward
proposals to shareholders to undertake a tender offer for up to 25 per cent of the issued share capital of the Company at the discretion
of the Board. Any such tender offer will be at a price equal to the then prevailing net asset value less two per cent (less the costs of
the tender offer). Any tender offer will also be conditional on shareholders approving the continuation vote in 2024 and would take
place following the Company’s 2024 Annual General Meeting.
The introduction of any conditional tender offer will not affect the Board’s current approach to discount management.

Further details of the conditional tender offer will be provided to shareholders in 2024 and in the meantime no action is necessary.
Outlook
Given the current political background, equity markets are likely to remain volatile. It is, however, important to recognise that many
of the countries in which TEMIT invests are generating a good level of economic growth and higher rates of growth than developed
markets. Economic growth does not necessarily lead directly to investment returns and this is why our Investment Manager
maintains a large team which is focused on analysing the prospects of individual companies. As a Board, we remain of the view that
effective stock picking is the key to success in our investment mandate, and that our Investment Manager is well equipped to deliver
positive returns.
Paul Manduca
Chairman
25 November 2019

Interim Management Report

Principal risks
The Company predominantly invests directly in the stock markets of emerging markets. The principal risks facing the Company,
as determined by your Board, are:
• Investment and concentration;
• Market;
• Geopolitical;
• Foreign currency;
• Portfolio liquidity;
• Counterparty and credit;
• Operations and custody;
• Key personnel;
• Regulation; and
• Cyber security.
The Board has provided the Investment Manager with guidelines and limits for the management of these principal risks. Further
information on risks is given in the Strategic Report within the Annual Report and Audited Accounts, which is available on the
Company’s website (www.temit.co.uk). There have been no changes to the principal risks reported in the Annual Report and, in the
Board’s view, these principal risks are equally applicable to the remaining six months of the financial year as they were to the six
months under review.
Brexit
TEMIT is a company registered in Scotland. At the time of writing, the timing and terms of the United Kingdom’s exit from the
European Union (“Brexit”) are unclear.
TEMIT is regulated as an AIF under UK law, with its AIFM being FTIS, a Luxembourg company. In light of the UK’s Temporary
Permissions Regime that would allow up to a three-year extension of current “passporting” for the AIFM into the UK in the event
of a ‘No Deal’ Brexit, we expect that the UK FCA will continue to recognise FTIS as TEMIT’s AIFM for the foreseeable future
and, certainly, for a sufficient period to make alternative plans if future events require it.
TEMIT invests the majority of its assets outside the EU and the vast majority of shareholders are based in the UK, New Zealand
and the United States. The only material adverse effect of the Brexit process on TEMIT to date has been the increase in volatility
of the value of the British pound, which affects the value of TEMIT’s assets in the hands of UK-based shareholders.
While Brexit has created a degree of uncertainty, in light of the nature of TEMIT’s business and the regulatory arrangements
described above, the Board has decided that Brexit is not one of the principal risks facing the Company. Nevertheless, the Board
and AIFM continue to monitor developments closely.
Related party transactions
There were no transactions with related parties during the six months ended 30 September 2019. Under the Statement of
Recommended Practice for investment trusts issued by the Association of Investment Companies in November 2014 and updated
in October 2019, the Franklin Templeton entities are not classified as related parties under IAS 24 (as adopted by the EU).
Going concern
The Company’s assets consist of equity shares in companies listed on recognised stock exchanges and in most circumstances are
realisable within a short timescale. Having made suitable enquiries, including considerations of the Company’s investment objective,
the nature of the portfolio, expenditure forecasts and the principal risks and uncertainties, the Directors are satisfied that the
Company has adequate resources to continue to operate as a going concern for the foreseeable future, being a period of at least 12
months, and as such, a going concern basis is appropriate in preparing the Financial Statements.
Statement of Directors’ Responsibilities
The Disclosure and Transparency Rules of the UK Listing Authority require the Directors to confirm their responsibilities in relation
to the preparation and publication of the Interim Management Report and Financial Statements.

Each of the Directors, who are listed in the full half-yearly report, confirms that to the best of their knowledge:
(a) the condensed set of financial statements, for the period ended 30 September 2019, have been prepared in accordance with the
applicable International Accounting Standard (IAS) 34 “Interim Financial Reporting” as adopted by the EU; and
(b) the Half Yearly Report includes a fair review of the information required by:
(i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during
the first six months of the financial year and their impact on the condensed set of financial statements, and a description of
the principal risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the financial position or performance of the entity
during that period, and any changes in the related party transactions described in the last annual report that could do so.
The Half Yearly Report was approved by the Board on 25 November 2019 and the above responsibility statement was signed on its
behalf by
Paul Manduca
Chairman
25 November 2019

Portfolio Report

Market Overview
Emerging markets weathered increased volatility over the 6-month period driven primarily by ongoing US-China trade-related
events, central bank monetary policies and concerns of slowing global economic growth. Against this backdrop, the MSCI Emerging
Markets Index produced a total return of 2.2% in the period under review, while TEMIT delivered a net asset value total return
(cum-income) of 6.3% (all figures in sterling). Full details of TEMIT’s performance can be found in the full half-yearly report.
US-China trade tensions escalated in May with the two countries increasing tariffs on imports of each other’s goods. Market hopes
of an agreement in the near future, following a truce in the summer, were short-lived with several rounds of retaliatory actions
following in the latter part of the reporting period. The United States also formally labelled China as a currency manipulator in
August after the Chinese renminbi depreciated to above a symbolic ¥7 per US dollar for the first time since 2009. These events
sparked a broad sell-off in Chinese equities as well as global stock markets. Conciliatory moves, however, were made in September
along with a decision to resume trade talks in October. The US and China reached a partial agreement on the first phase of a deal
between the two countries, which included the US suspending the scheduled October tariff increase and China increasing agricultural
purchases. The agreement is also believed to cover intellectual property, financial services and currency measures.
Emerging markets received some good news in July when the US Federal Reserve (“Fed”) cut its key interest rate for the first time
since 2008. A second interest rate cut was subsequently made in September and another after our reporting period in late October.
The rate cuts should alleviate upward pressure on US dollar exchange rates, helping emerging market currencies while also
facilitating greater flexibility in emerging market monetary policy with several markets including South Korea, Brazil, Indonesia,
and Thailand already reducing interest rates. History has shown that over the last four Fed rate cycles, emerging markets have tended
to outperform the US market in the 2-3 year period following the first rate cut. The only exception to this was in the run up to the
Asian financial crisis in the late 1990s.
Chinese stocks fell over the reporting period as investors focused on the US-China trade conflict and slowing growth in China.
However, we believe that China’s economy may be better able to absorb the trade issues than the market fears. It is important to
note that China’s growth is now less dependent on exports than it was a decade ago. China’s trade balance with the United States
has also narrowed. China’s economy has been re-balancing with domestic consumption the key driver of economic growth. In
addition to targeted stimulus measures, the government lifted restrictions on foreign investment in China as part of efforts to increase
access to its financial markets. The People’s Bank of China also implemented an interest-rate reform in August, designating the
loan prime rate as the new benchmark for household and business loans, effectively lowering interest rates in August and September.
China’s second-quarter gross domestic product (“GDP”) growth slowed to 6.2%, although the figure was in line with market
expectations. We expect the government to continue to focus on economic restructuring and sustainable long-term growth. Although
China was TEMIT’s largest market position at the end of the reporting period, it remained underweight relative to the benchmark.
South Korea was TEMIT’s second-largest market position at the end of September and overweight versus the benchmark. The
South Korean market started the period on a positive note on better-than-expected first-quarter earnings results and a change in the
Bank of Korea’s monetary policy guidance from a defensively hawkish to a more neutral monetary policy. Escalation in the US-
China trade dispute, growing trade tensions between South Korea and Japan, and North Korea’s missile launches fuelled investor
caution. South Korea’s trade feud with Japan heightened as both countries decided to end preferential trade treatment for each other,
driving the market down. The central bank cut its key interest rate in July, reversing the rate hike from November 2018 in view of
raising growth concerns and a downward inflation outlook. Markets staged a recovery late in the period on the back of the
government’s record expansionary 2020 budget which was intended to stimulate the economy and cushion the impact of the trade
feud with Japan. Improving sentiment in the computer memory sector further supported market sentiment and resulted in equity
prices ending the reporting period virtually unchanged. While domestic economic indicators have been weak, expectations for a
recovery in the Korean economy are rising on encouraging signs in major industries including semiconductors, shipbuilding and
automobile.
TEMIT maintained an underweight exposure to Taiwan, where a significant position in Taiwan Semiconductor Manufacturing
Company (“TSMC”), one of the portfolio’s largest holdings, made up a large portion of the exposure. Recovery in the technology
sector favoured the Taiwanese market where technology-related stocks account for a substantial portion. TSMC is one of the world’s
leading semiconductor makers and counts major global technology companies amongst its clients. While Huawei’s addition to the
US Entity List
1
raised concerns, the stock performed well over the period, ending September at a record high share price, supported
by strong smartphone sales and its high-performance computing business. A strong 2020 outlook driven by accelerating 5G
development demand further supported the shares. We favour TSMC’s technological lead in producing cutting-edge chips that could
see more demand from mobile devices and advanced applications such as high-performance computing.
Optimism surrounding the government’s economic agenda, including the key social security reform, has resulted in a more
favourable climate in Brazil. While the country’s economic recovery has been slower than expected, with the government
forecasting the GDP to grow by only 0.85% in 2019, government and central bank efforts could improve the country’s longer-term
GDP growth potential. Inflation has also remained under control, allowing the central bank to lower interest rates to record-low
levels to stimulate the economy. We believe that the approval of pension system reform is key to stimulating investment and credit,
which should help improve economic activity, as well as helping significantly to reduce Brazil’s fiscal deficit. A major privatisation

plan has also been announced, and we expect tax and other reforms that could improve the ease of doing business to follow. Despite
the strong market performance over the last 12 months, we remain positive on the outlook for Brazil’s market, adding to our
exposure, which remained overweight compared to the benchmark index, during the reporting period.
1
Those included in the Entity List are subject to specific licensing requirements to export to the US. The Entity List is seen as a
“red flag” by the US government, meaning that the transaction is likely to face much more scrutiny.
Russia was the best performing market in the MSCI Emerging Markets Index over the six-month period and remains one of the
most undervalued markets globally, despite its strong performance. Our overweight position relative to the benchmark had a positive
impact on relative performance. Many international investors have avoided this market because of economic sanctions against the
country. However, we believe that Russia’s fairly self-sustained economy has limited the impact of sanctions. While the economy
has proven to be resilient, we have seen many companies take steps to adapt and flourish in the current environment. Moreover,
corporate governance in many Russian companies has improved significantly. For example, many companies including Sberbank
and Gazprom have increased dividend pay-outs, while others like Lukoil have undertaken share buybacks to improve shareholder
value. Overall, we believe that Russia continues to offer interesting opportunities and that exposure to select well-established
companies in the financials, energy, materials and communication services sectors should continue to serve TEMIT well.
Indian equity markets experienced some volatility in the earlier part of the reporting period, impacted by uncertainty around the
outcome of the national elections, weaker economic growth and global macro uncertainty. While sentiment did turn positive
following Prime Minister Narendra Modi’s victory with an outright majority for his party, weaker economic growth this year has
continued to impact overall investor sentiment. The government surprised investors with a meaningful reduction in India’s corporate
tax rates to spur investment and boost economic growth. Overall this is positive, with the level of impact differing from sector to
sector. For instance, banking would be a key beneficiary as it is a full-tax paying industry. Most consumer companies also benefit
from the corporate tax cuts. A key holding in India is one of the country’s largest private-sector banks, ICICI Bank. We believe that
ICICI Bank’s strong retail franchise and extensive network make it well positioned to benefit from India’s rapidly growing banking
system. Overall, the case for investing in India remains strong as fundamentals remain intact. Indian equities are also expected to
show resilience to global trade concerns due to less export dependence. We continue to favour companies that can benefit from
secular growth drivers such as favourable demographics, infrastructure investment, urban and rural consumption growth and
increasing income levels.
The Argentine market tumbled during the reporting period amidst increased political and economic uncertainty as the government
imposed capital controls and extended the maturities of its debt. We note, however, that market volatility has been largely contained
within the country. Argentina remains one of TEMIT’s smallest market exposures and underweight relative to the benchmark.
Investment Strategy, Portfolio Changes and Performance
The following sections show how different investment factors (stocks, sectors and geographies) accounted for TEMIT’s
performance over the period. We continue to emphasise our investment process that selects companies based on their individual
attributes and ability to generate risk-adjusted returns for investors, rather than taking a high-level view of sectors, countries or
geographic regions to determine our investment allocations.
While we do consider macroeconomic and political events, our fundamental focus is on individual companies and their earnings is
our major focus in achieving our stated objectives.
Our investment style is centred on finding companies with sustainable earnings power and whose shares trade at a discount relative
to their intrinsic worth and to other investment opportunities in the market. We also pay close attention to risks. Our portfolio
remains broad-based including what we view to be the best opportunities within any sector or market.
We continue to utilise our research-based, active approach to help us to find companies which have high standards of corporate
governance, respect their shareholder base and understand the local intricacies that may determine consumer trends and habits.
Utilising our large team of analysts, we aim to maintain close contact with the board and senior management of existing and potential
investments and believe in engaging constructively with our investee companies.

All these factors require us to conduct detailed analyses of potential returns versus risks with a time horizon of typically five years
or more.
Performance Attribution Analysis %
Six months to 30 September 2019 2018

2017 2016 2015

Net asset value total return
(a)
6.3

(1.5 )

11.4

29.6

(28.0 )
Expenses incurred 0.5

0.6

0.6

0.6

0.6

Gross total return
(a)
6.8

(0.9 )

12.0

30.2

(27.4 )
Benchmark total return
(a)
2.2

(1.8 )

7.1

21.7

(18.8 )
Excess return
(a)
4.6

0.9

4.9

8.5

(8.6 )
Stock selection 2.6

(0.2 )

1.8

0.2

1.2

Sector allocation 1.6

(0.5 )

2.7

7.9

(12.7 )
Currency 0.4

1.1

0.1

0.4

2.6

Residual
(a)
–

0.5

0.3

–

0.3

Total Portfolio Manager Contribution 4.6

0.9

4.9

8.5

(8.6 )
Source: FactSet and Franklin Templeton Investments.
(a)
A glossary of alternative performance measures is included in the full half-yearly report.

Contributors and Detractors by Security
Top Contributors to Relative Performance by Security (%)
(a)

Top Contributors
Share Price
Total Return
Relative
Contribution to
Portfolio
Brilliance China Automotive 28.5

0.8
Gazprom, ADR 71.7

0.6
Sunny Optical Technology 76.8

0.6
Taiwan Semiconductor Manufacturing 21.4

0.5
NAVER 27.0

0.5
Naspers 4.4

0.4
ICICI Bank 12.2

0.4
Unilever
(b)
13.0

0.4
Samsung Electronics 11.9

0.3
Sberbank of Russia, ADR 19.7

0.3
(a)
For the period 31 March 2019 to 30 September 2019.
(b)
Security not included in the MSCI Emerging Markets Index.
Brilliance China Automotive manufactures and sells automobiles for China’s domestic market, predominantly through its joint
venture (“JV”) with German luxury car maker BMW. Shares partially recovered, as investors saw value emerge following a sharp
fall in the share price in the latter part of 2018 after investors reacted negatively to BMW’s plans to increase its investment in the
JV to a majority share. Although the company reported weak results for the first half of 2019, the announcement of a special dividend
provided investors with some comfort. Sentiment in the stock also benefited from government measures to support car sales. While
the stock remains a significant holding, we decreased our position to reduce portfolio risk.
Based in Russia, Gazprom is the largest producer of gas in the world, in terms of reserves and production. Well positioned to benefit
from the growing global energy demand, the stock also trades at attractive valuations in terms of metrics such as price-to-earnings
and price-to-book. Shares surged following the announcement of a sharply higher dividend for 2018. Management also disclosed a
new dividend policy, which included plans gradually to move towards increasing its dividend pay-out ratio to 50%. We reduced our
holdings in the company following the price increase to rebalance the portfolio.
Sunny Optical Technology designs and manufactures optical and optical-related products. It is the world’s largest supplier of
automotive lenses and China’s largest maker of smartphone camera modules and lenses. Shares in Sunny Optical Technology
recorded a notable fall in May, on concerns about its customer Huawei being added to the US Entity List
1
and as a result of a general
decline in the share prices of technology companies as investors grew concerned about the escalating US-China trade conflict. The
sharp fall in the share price provided us with an attractive opportunity to add the shares to the portfolio, as we started to see value
emerge and believe that the company is well-positioned to capture growing demand for high-specification smartphone lens sets.

Shares subsequently rose in the later part of the period, supported by resilient monthly shipment data and better-than-expected first-
half 2019 revenue and net income on the back of strong sales. We trimmed our position following the sharp price rise.
1
Those included in the Entity List are subject to specific licensing requirements to export to the US. The Entity List is seen as
a “red flag” by the US government, meaning that the transaction is likely to face much more scrutiny.

Top Detractors to Relative Performance by Security (%)
(a)

Top Detractors
Share Price
Total Return


Relative
Contribution to
Portfolio

Massmart
(b)
(44.4 )

(0.4 )
Glenmark Pharmaceuticals (47.8 )

(0.4 )
HDC Hyundai Development (35.0 )

(0.3 )
Cognizant Technology Solutions
(b)
(11.2 )

(0.2 )
H&H Group
(b)
(27.8 )

(0.2 )
LG (9.4 )

(0.2 )
Bank Danamon Indonesia (5.6 )

(0.2 )
MGM China
(b)
(20.1 )

(0.1 )
Prosus
(c)
(9.8 )

(0.1 )
MCB Bank (13.4 )

(0.1 )
(a)
For the period 31 March 2019 to 30 September 2019.
(b)
Security not included in the MSCI Emerging Markets Index.
Massmart is a leading South African distributor and retailer of food products, general merchandise, alcohol, home improvement
equipment and supplies as well as a wholesaler. US-based Walmart, the world’s largest retailer, owns a controlling stake in
Massmart. Our initial thesis on this stock was based on expectations of a meaningful turn-around in the group’s retail discount stores
segment, which could have driven the overall group margin. However, weak merchandising, online competition and slowing revenue
growth amidst a weak macroeconomic environment have delayed a turnaround. Depreciation in regional currencies further pressured
the business. The business also struggled to sell inventory accumulated in the previous trading season – these were marked down
and affected margin. Following the release of a profit decline warning, the company reported a loss for the first half of 2019 and did
not pay out any dividends. The resignation of the CEO and CFO further impacted sentiment. A new CEO was transferred from
Walmart. He has been brought in to turn around the business and we have already seen some management changes aimed at driving
sales and margins. We expect greater Walmart involvement that would include leveraging the Walmart supply chain and technology
to drive Massmart’s online business. We continued to use the price fall gradually to add to our existing position in this stock, as we
maintain a positive long-term view on the company’s prospects.
Glenmark Pharmaceuticals is a mid-size Indian pharmaceutical company with a presence in both generics and product innovation.
The company reported weak second-quarter results with lower-than-expected revenue and earnings driven by lower US revenues
and higher research and development costs. Sales in India, however, were a bright spot, recording healthy growth. Delays in US
approvals and the launch of a new product for the treatment of seasonal allergic rhinitis, along with regulatory concerns at one of
its formulation facilities led shares to fall sharply in June, ending September at a multi-year low. We believe that there is a revenue-
cost mismatch in the near term given the investment in innovation research and development (R&D). The company is, however,
working towards a spin-off of its innovation R&D business, which could normalise margins and drive stronger free cash flow
generation. The company is also planning to divest non-core assets to reduce debt. Given the near-term catalysts and strong Indian
business, we used the fall in the share price to add to our position in the stock.
HDC Hyundai Development is one of the leading residential property developers in South Korea. With a strong brand name – “I-
Park”, the company is estimated to have the largest market share in the residential construction business. Although the company
reported better-than-expected first quarter corporate results and higher revenues and net profit in the second quarter, government
regulations aimed at curbing housing prices and household debt weighed on profitability. Although HDC has some exposure to
hotels and duty-free stores, the company’s decision to participate in a bid to acquire Asiana Airlines was viewed unfavourably by
investors who found the industry to be unrelated to HDC’s main residential business. We are of the opinion that a low interest rate
environment, however, is expected to continue to drive housing demand, with the Bank of Korea lowering rates for the first time in
three years in July as part of efforts to boost economic growth. We also believe that the group is well placed to benefit from increased
fiscal spending to boost infrastructure development in non-metropolitan areas.

Top Contributors and Detractors to Relative Performance by Sector (%)
(a)
Top Contributors
MSCI
Emerging
Markets Index
Sector Total
Return


Relative
Contribution
to Portfolio Top Detractors
MSCI
Emerging
Markets Index
Sector Total
Return


Relative
Contribution
to Portfolio

Information Technology

12.2

1.4

Consumer Staples

8.5

(0.6 )
Financials

1.5

1.3

Industrials

0.3

(0.4 )
Consumer Discretionary

1.7

1.2

Health Care

(7.7 )

(0.3 )
Materials

(6.4 )

0.6

Utilities
(b)


4.8

(0.1 )
Communication Services

(2.0 )

0.6

Energy

3.4

0.5

Real Estate

(3.5 )

0.2

(a)
For the period 31 March 2019 to 30 September 2019.
(b)
No companies held by TEMIT in this sector.
Favourable stock selection in the information technology, financials and consumer discretionary sectors added to TEMIT’s
performance relative to the benchmark index in the review period. An overweight exposure relative to the benchmark in the
information technology sector further added to relative returns. Asian technology companies were among the top performance
contributors as they continue to evolve into global leaders. Although we maintain a positive outlook on the sector, we reduced our
holdings in information technology companies during the period to realise gains and rebalance the portfolio following the sector’s
outperformance. Holdings in the financial and consumer discretionary sectors were also reduced to raise funds for other attractive
investment opportunities. Conversely, the consumer staples, industrials and health care sectors mildly detracted from relative returns
largely due to the top three detracting securities discussed above. We will continue to monitor the developments at these companies
and act accordingly.
Top Contributors and Detractors to Relative Performance by Country (%)
(a)
Top Contributors
MSCI
Emerging
Markets
Index
Country
Total
Return



Relative
Contribution
to Portfolio




Top Detractors


MSCI
Emerging
Markets
Index
Country
Total
Return



Relative
Contribution
to Portfolio

China/Hong Kong

(3.2 )

2.3

United States
(b)


–

(0.3) )
South Korea

0.2

1.0

Indonesia

3.9

(0.3) )
Russia

22.9

0.6

Mexico

5.3

(0.1) )
United Kingdom
(b)


–

0.4

Pakistan

(14.9 )

(0.1) )
Saudi Arabia
(c)


(4.6 )

0.3

Turkey
(c)


21.7

(0.1) )
Cambodia
(b)


–

0.2

Hungary

(2.5 )

(0.1) )
South Africa

(1.4 )

0.2

Thailand

8.9

(0.1) )
Taiwan

13.2

0.2

Greece
(c)


19.8

(0.0) )
Brazil

7.2

0.1

Qatar
(c)


6.2

(0.0) )
Chile
(c)


(6.8 )

0.1

Kenya
(b)


–

(0.0) )
(a)
For the period 31 March 2019 to 30 September 2019.
(b)
No companies included in the MSCI Emerging Markets Index in this country.
(c)
No companies held by TEMIT in this country.
China/Hong Kong was the largest contributor to TEMIT’s returns relative to the benchmark index. Both stock selection and an
underweight exposure to the underperforming Chinese market had a positive impact. Our selection of stocks in South Korea and
overweight exposure to Russia were also among the major contributors to relative returns. NAVER, the dominant search engine in
South Korea, and Samsung Electronics, one of the world’s largest electronic manufacturers, were key performance drivers in South
Korea. We increased our investments in China/Hong Kong and South Korea as we continued to find attractive investment
opportunities. Holdings in Russia were, however, reduced as we sold some shares in Gazprom to rebalance the portfolio. In contrast,
relative performance was hurt by stock selection in the United States, Indonesia and Mexico. TEMIT’s holding in Cognizant
Technology Solutions, a US-listed technology services provider that derives most of its earnings from services produced in India,
was the key detractor in the United States. We believe that the company remains a strong industry player, especially as it pursues
growth in higher-margin digital services, has good cash flow generation and trades at what we consider to be attractive valuations;

we see the potential for a turnaround. The share price fall provided us with an opportunity to increase our holdings at attractive
prices. We maintain underweight exposures to Indonesia and Mexico relative to the benchmark and remain comfortable with our
position.
Portfolio changes by Sector

Total Return in sterling
Sector
31 March 2019
Market Value
£m


Purchases
£m
Sales
£m


Market
Movement
£m


30 September 2019
Market Value
£m


TEMIT
%


MSCI Emerging
Markets Index
%

Financials

585

3

(80 )

24

532

6.4

1.5

Information Technology

419

43

(42 )

58

478

16.0

12.2

Consumer Discretionary

448

25

(104 )

21

390

6.5

1.7

Communication Services

227

96

(16 )

5

312

3.1

(2.0 )
Energy

163

17

(28 )

9

161

8.9

3.4

Consumer Staples

152

17

(35 )

(3 )

131

(2.1 )

8.5

Materials

66

47

(22 )

(2 )

89

0.6

(6.4 )
Industrials

52

18

(1 )

(10 )

59

(16.9 )

0.3

Health Care

42

2

–

(11 )

33

(26.9 )

(7.7 )
Real Estate

8

–

(8 )

–

–

6.6

(3.5 )
Net current liabilities
(a)


(44 )

–

–

30
(b)


(14 )

–

–

Total

2,118

268

(336 )

121

2,171

Sector Asset Allocation
As at 30 September 2019
Sector weightings vs benchmark (%)
TEMI
T
MSCI Emerging Markets
Index
Financials 24.7 24.6
Information Technology 22.0 15.0
Consumer Discretionary 17.8 13.1
Communication Services 14.4 11.6
Energy 7.4 7.7
Consumer Staples 6.0 6.9
Materials 4.1 7.4
Industrials 2.7 5.4
Health Care 1.5 2.6
Real Estate – 2.9
Utilities – 2.8
(a)
The Company’s net current liabilities per the Statement of Financial Position in the full half-yearly report.
(b)
The movement relates to changes in cash, receivables, payables, the loan facility and capital gains tax provision.

Portfolio changes by Country

Total Return in sterling

Country
31 March
2019
Market Value
£m



Purchase
s
£m


Sale
s
£m



Market
Movemen
t
£m



30 September
2019
Market Value
£m



TEMI
T
%


MSCI
Emerging
Markets Index
%

China/Hong Kong

512

136

(95 )

48

601

4.0

(3.2 )
South Korea

289

45

(18 )

19

335

7.1

0.2

Taiwan

206

–

(8 )

26

224

17.2

13.2

Brazil

181

49

(26 )

11

215

7.0

7.2

Russia

189

–

(16 )

24

197

15.9

22.9

India

162

2

(7 )

2

159

2.0

0.8

Other

623

36

(166 )

(39 )

454

–

–

Net current
liabilities
(a)


(44 )

–

–

30
(b
)


(14 )

Total

2,118

268

(336 )

121

2,171

Geographic Asset Allocation
As at 30 September 2019
Country weightings vs benchmark (%)
(c)
TEMIT MSCI Emerging Markets
Index
China/Hong Kong 27.5 31.9
South Korea 15.4 12.2
Taiwan 10.3 11.5
Brazil 9.9 7.4
Russia 9.1 4.0
India 7.2 8.9
United Kingdom
(d)
3.2 –
Thailand 3.2 2.9
United States
(d)
3.2 –
South Africa 3.1 4.6
Mexico 2.1 2.5
Indonesia 1.2 2.1
Cambodia
(d)
1.2 –
Hungary 0.9 0.3
Kenya
(d)
0.8 –
Pakistan 0.7 –
Philippines 0.6 1.1
Czech Republic 0.5 0.1
Peru 0.4 0.4
Argentina 0.1 0.2
Nigeria
(d)
–0.0 –
(a)
The Company’s net current liabilities per the Statement of Financial Position on in the full half-yearly report.
(b)
The movement relates to changes in cash, receivables, payables, the loan facility and capital gains tax provision.
(c)
Other countries included in the benchmark are Chile, Colombia, Egypt, Greece, Malaysia, Poland, Qatar, Turkey, Saudi
Arabia and the United Arab Emirates.
(d)
Countries not included in the MSCI Emerging Markets Index.

Portfolio Investments by Fair Value
As at 30 September 2019
Holding Country Sector Trading
(a)

Fair Value
£’000

% of Net
Assets
Samsung Electronics

South Korea

Information Technology

PS

168,315

7.8
Taiwan Semiconductor Manufacturing

Taiwan

Information Technology

NT

163,225

7.5
Tencent

China/Hong Kong

Communication Services

IH

132,977

6.1
Alibaba, ADR
(b)


China/Hong Kong

Consumer Discretionary

IH

119,732

5.5
ICICI Bank

India

Financials

NT

85,042

3.9
Unilever
(c)


United Kingdom

Consumer Staples

PS

68,538

3.2
Brilliance China Automotive

China/Hong Kong

Consumer Discretionary

PS

67,825

3.1
NAVER

South Korea

Communication Services

IH

59,698

2.7
LUKOIL, ADR
(b)


Russia

Energy

NT

57,579

2.7
Naspers

South Africa

Consumer Discretionary

PS

53,430

2.5
TOP 10 LARGEST INVESTMENTS

976,361

45.0
Banco Bradesco, ADR
(b)(d)


Brazil

Financials

IH

51,123

2.4
Sberbank of Russia, ADR
(b)


Russia

Financials

NT

50,208

2.3
Cognizant Technology Solutions
(c)


United States

Information Technology

IH

49,657

2.3
Itaú Unibanco, ADR
(b)


Brazil

Financials

NT

49,280

2.3
LG

South Korea

Industrials

IH

43,594

2.0
China Construction Bank

China/Hong Kong

Financials

NT

37,975

1.7
Banco Santander Mexico, ADR
(b)


Mexico

Financials

NT

37,638

1.7
Yandex

Russia

Communication Services

NT

32,496

1.5
CNOOC

China/Hong Kong

Energy

NT

29,102

1.3
Ping An Bank

China/Hong Kong

Financials

PS

27,584

1.3
TOP 20 LARGEST INVESTMENTS

1,385,018

63.8
Gazprom, ADR
(b)


Russia

Energy

PS

27,465

1.3
Astra International

Indonesia

Consumer Discretionary

NT

26,424

1.2
China Mobile

China/Hong Kong

Communication Services

NT

26,190

1.2
Vale

Brazil

Materials

NH

25,785

1.2
Kasikornbank

Thailand

Financials

IH

25,515

1.2
NagaCorp

Cambodia

Consumer Discretionary

PS

25,083

1.2
Infosys Technologies

India

Information Technology

NT

24,781

1.1
China Resources Cement Holdings

China/Hong Kong

Materials

IH

23,931

1.1
Kiatnakin Bank

Thailand

Financials

NT

23,003

1.1
Lojas Americanas

Brazil

Consumer Discretionary

NT

22,592

1.0
TOP 30 LARGEST INVESTMENTS

1,635,787

75.4
(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.
(c)
This company, listed on a stock exchange in a developed market, has significant exposure to operations from emerging
markets.
(d)
Preferred Shares.

Holding Country Sector Trading
(a)

Fair Value
£’000

% of Net
Assets
Sunny Optical Technology

China/Hong Kong

Information Technology

NH

21,402

1.0
POSCO

South Korea

Materials

IH

21,178

1.0
Ping An Insurance Group

China/Hong Kong

Financials

PS

20,045

0.9
Gedeon Richter

Hungary

Health Care

IH

19,552

0.9
IMAX
(c)


United States

Communication Services

NT

19,369

0.9
Bajaj Holdings & Investments

India

Financials

PS

18,338

0.8
Petroleo Brasileiro, ADR
(b)


Brazil

Energy

NH

17,575

0.8
Mail.Ru, GDR
(e)


Russia

Communication Services

NT

17,141

0.8
Hon Hai Precision Industry

Taiwan

Information Technology

NT

14,999

0.7
Catcher Technology

Taiwan

Information Technology

PS

12,917

0.6
TOP 40 LARGEST INVESTMENTS

1,818,303

83.8
H&H Group

China/Hong Kong

Consumer Staples

IH

12,891

0.6
Massmart

South Africa

Consumer Staples

IH

12,778

0.6
B3
(f)


Brazil

Financials

PS

12,539

0.6
MCB Bank

Pakistan

Financials

NT

12,030

0.6
CTBC Financial Holding

Taiwan

Financials

NT

11,615

0.5
Tata Chemicals

India

Materials

IH

11,473

0.5
China Merchants Bank

China/Hong Kong

Financials

NT

11,319

0.5
HDC Hyundai Development

South Korea

Industrials

NT

10,901

0.5
Baidu, ADR
(b)


China/Hong Kong

Communication Services

IH

10,586

0.5
Thai Beverages

Thailand

Consumer Staples

PS

10,571

0.5
TOP 50 LARGEST INVESTMENTS

1,935,006

89.2
China Petroleum and Chemical

China/Hong Kong

Energy

PS

10,326

0.5
Glenmark Pharmaceuticals

India

Health Care

IH

10,207

0.5
Moneta Money Bank

Czech Republic

Financials

NT

10,047

0.5
NetEase, ADR
(b)


China/Hong Kong

Communication Services

PS

9,897

0.5
B2W Digital

Brazil

Consumer Discretionary

NT

9,427

0.4
MGM China

China/Hong Kong

Consumer Discretionary

NT

9,340

0.4
Fila Korea

South Korea

Consumer Discretionary

NH

8,884

0.4
TOTVS

Brazil

Information Technology

PS

8,817

0.4
Nemak

Mexico

Consumer Discretionary

IH

8,572

0.4
Siam Commercial Bank

Thailand

Financials

NT

8,501

0.4
TOP 60 LARGEST INVESTMENTS

2,029,024

93.6
(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.
(c)
This company, listed on a stock exchange in a developed market, has significant exposure to operations from emerging
markets.
(e)
UK listed Global Depositary Receipt.
(f)
Holding changed its name from BM&F Bovespa during the period.

Holding Country Sector Trading
(a)

Fair Value
£’000


% of Net
Assets

Intercorp Financial Services

Peru

Financials

NT

8,359

0.4

Uni-President China

China/Hong Kong

Consumer Staples

PS

8,358

0.4

BDO Unibank

Philippines

Financials

NT

7,773

0.4

PChome Online

Taiwan

Consumer Discretionary

NT

7,668

0.4

Largan Precision

Taiwan

Information Technology

NT

7,352

0.3

SK Innovation

South Korea

Energy

NT

7,238

0.3

M. Dias Branco

Brazil

Consumer Staples

NT

7,213

0.3

East African Breweries

Kenya

Consumer Staples

NT

7,102

0.3

Norilsk Nickel, ADR
(b)


Russia

Materials

NT

6,795

0.3

Prosus

China/Hong Kong

Consumer Discretionary

PS

6,760

0.3

TOP 70 LARGEST INVESTMENTS

2,103,642

97.0

Hanon Systems

South Korea

Consumer Discretionary

NT

6,622

0.3

FIT Hon Teng

Taiwan

Information Technology

NT

6,437

0.3

Coal India

India

Energy

IH

6,282

0.3

Wiz Soluções e Corretagem

Brazil

Financials

NT

5,812

0.3

Equity Group

Kenya

Financials

NT

5,696

0.3

TMK, GDR
(e)


Russia

Energy

NT

5,256

0.2

BAIC Motor

China/Hong Kong

Consumer Discretionary

NT

5,129

0.2

KCB Group

Kenya

Financials

PS

4,938

0.2

Hankook Tire

South Korea

Consumer Discretionary

NT

4,935

0.2

Security Bank

Philippines

Financials

PS

4,911

0.2

TOP 80 LARGEST INVESTMENTS

2,159,660

99.5

MAHLE Metal Leve

Brazil

Consumer Discretionary

NT

4,892

0.2

COSCO Pacific

China/Hong Kong

Industrials

NT

4,324

0.2

KT Skylife

South Korea

Communication Services

NT

3,447

0.2

Dairy Farm

China/Hong Kong

Consumer Staples

PS

2,848

0.1

Biocon

India

Health Care

NT

2,822

0.1

Weifu High-Technology

China/Hong Kong

Consumer Discretionary

NT

2,269

0.1

BBVA Banco Francés, ADR
(b)


Argentina

Financials

NT

1,789

0.1

United Bank

Pakistan

Financials

NT

1,391

0.1

Univanich Palm Oil

Thailand

Consumer Staples

PS

612

0.0

Interpark

South Korea

Consumer Discretionary

PS

530

0.0

TOP 90 LARGEST INVESTMENTS

2,184,584

100.6

Nigerian Breweries

Nigeria

Consumer Staples

NT

183

0.0

TOTAL INVESTMENTS

2,184,767

100.6

NET CURRENT LIABILITIES

(13,831 )

(0.6 )
TOTAL NET ASSETS

2,170,936

100.0

(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.
(c)
Prosus is a Company listed in the Netherlands. The classification of China/Hong Kong is due to a significant proportion of its
revenue coming from its holding in Tencent.
(d)
UK listed Global Depositary Receipt.

Portfolio Summary
As at 30 September 2019
All figures are in %


Communication

Services


Consumer

Discretionary


Consumer
Staples


Energy


Financials


Health Care


Industrials


Information

Technology


Materials


Real Estate


Total Equities


Net current

liabilities
(a)



30 September 2019

Total



31 March 2019

Total


Argentina

–

–

–

–

0.1

–

–

–

–

–

0.1

–

0.1

0.2

Brazil

–

1.6

0.3

0.8

5.6

–

–

0.4

1.2

–

9.9

–

9.9

8.6

Cambodia

–

1.2

–

–

–

–

–

–

–

–

1.2

–

1.2

1.3

China/Hong Kong

8.3

9.6

1.1

1.8

4.4

–

0.2

1.0

1.1

–

27.5

–

27.5

24.3

Czech Republic

–

–

–

–

0.5

–

–

–

–

–

0.5

–

0.5

0.5

Hungary

–

–

–

–

–

0.9

–

–

–

–

0.9

–

0.9

0.9

India

–

–

–

0.3

4.7

0.6

–

1.1

0.5

–

7.2

–

7.2

7.7

Indonesia

–

1.2

–

–

–

–

–

–

–

–

1.2

–

1.2

3.5

Kenya

–

–

0.3

–

0.5

–

–

–

–

–

0.8

–

0.8

0.9

Mexico

–

0.4

–

–

1.7

–

–

–

–

–

2.1

–

2.1

2.4

Nigeria

–

0.0

–

–

–

–

–

–

–

–

0.0

–

0.0

0.0

Pakistan

–

–

–

–

0.7

–

–

–

–

–

0.7

–

0.7

0.8

Peru

–

–

–

–

0.4

–

–

–

–

–

0.4

–

0.4

1.2

Philippines

–

–

–

–

0.6

–

–

–

–

–

0.6

–

0.6

0.5

Russia

2.3

–

–

4.2

2.3

–

–

–

0.3

–

9.1

–

9.1

8.9

South Africa

–

2.5

0.6

–

–

–

–

–

–

–

3.1

–

3.1

7.0

South Korea

2.9

0.9

–

0.3

–

–

2.5

7.8

1.0

–

15.4

–

15.4

13.7

Taiwan

–

0.4

–

–

0.5

–

–

9.4

–

–

10.3

–

10.3

9.6

Thailand

–

–

0.5

–

2.7

–

–

–

–

–

3.2

–

3.2

4.2

United Kingdom

–

–

3.2

–

–

–

–

–

–

–

3.2

–

3.2

3.2

United States

0.9

–

–

–

–

–

–

2.3

–

–

3.2

–

3.2

2.7

Net current liabilities
(a)


–

–

–

–

–

–

–

–

–

–

–

(0.6 )

(0.6 )

(2.1 )
30 September 2019 Total

14.4

17.8

6.0

7.4

24.7

1.5

2.7

22.0

4.1

–

100.6

(0.6 )

100.0

–

31 March 2019 Total

10.6

21.1

7.3

7.7

27.6

2.0

2.5

19.8

3.1

0.4

102.1

(2.1 )

–

100.0

(a)
The Company’s net current liabilities per the Statement of Financial Position in the full half-yearly report.

Market Capitalisation Breakdown
(a)
(%)
Less than
£1.5bn

£1.5bn to
£5bn

Greater than
£5bn

Net current
liabilities
(b)


30 September 2019

7.4

11.6

81.6

(0.6 )
31 March 2019

8.2

19.1

74.8

(2.1 )

Split Between Markets
(c)
(%)

30 September 2019

31 March 2019

Emerging Markets

92.2

93.8

Developed Markets
(d)


6.4

5.9

Frontier Markets

2.0

2.4

Net current liabilities
(b)


(0.6 ) (2.1 )
(a)
A glossary of alternative performance measure is included in the full half-yearly report.
(b)
The Company’s net current liabilities per the Statement of Financial Position in the full half-yearly report.
(c)
Geographic split between “Emerging Markets”, “Frontier Markets” and “Developed Markets” are as per MSCI index
classifications.
(d)
Developed markets exposure represented by companies listed in the United Kingdom and United States.
Source: FactSet Research System, Inc.
Market Outlook
Emerging markets have been resilient in the face of negative macro events over the last six months but continue to trade at a wide
discount to developed markets. We are of the opinion that the underlying fundamentals in emerging markets do not justify these
valuations over the longer term, especially since we believe that the long-term structural drivers of emerging markets remain intact.
Emerging markets continue to demonstrate strong economic potential, with undervalued currencies, high foreign exchange reserves
and more favourable debt levels than their developed-market peers. Emerging market fundamentals and corporate governance have
also been improving. Emerging market cash flows have increased significantly, especially in the last three years, allowing companies
to reduce debt ratios, making more yield available to shareholders.
We believe that 2020 could be another strong year for earnings in emerging markets because, based on what we are seeing, a lot of
cyclical recoveries have started to emerge, and they should fully materialise in 2020. These conditions, when paired with improving
corporate governance that includes dividend pay-outs and buybacks, present an increasingly attractive long-term buying opportunity
for investors and contribute to our optimism in the asset class.
Although the US-China trade conflict has been dominating headlines, it should be stressed that the impact of the conflict has not
been limited to China; rather we have seen global implications. While the United States and China reached a verbal agreement in
October, de-escalating tensions in the short term, we remain cautious and expect continued market volatility until a more
comprehensive deal is finalised.
Slowing economic growth expectations, declining inflationary pressures and easing monetary policies in developed markets have
generally led emerging market central banks to turn to more expansionary monetary policies to stimulate their economies. In addition
to providing a more conducive operating environment for companies, we expect a low-interest rate environment to lead to greater
inflows into higher-yielding assets including emerging market equities.
In this environment, we continue to seek companies that demonstrate sustainable earnings power and potential resilience against
market uncertainty. Amongst the portfolio’s top holdings are technology and consumer-related companies that are highly
competitive and appear well-positioned to gain market share even in the face of macroeconomic challenges.
Many emerging market companies are world leaders in the areas of financials, technology and in the production of consumer goods.
We are confident that technology will remain a primary driver in emerging markets, whether manifested through world-leading
semiconductor manufacturing, e-commerce or other areas. The growing adoption of technology and growth of digital platforms
have also helped to create new goods and services for consumers across emerging markets, while at the same time creating growth
opportunities for many emerging market companies and investors.
We are of the opinion that consumerism in emerging markets should help to drive growth in many regions. Growing middle-class
populations and increasing affluence continue to spur demand for high-end products in emerging markets. In our view, companies
with superior products and services should experience sustainable growth in the years to come.

We will continue to use our experience, expertise and proven investment philosophy to find the companies we believe are best
positioned to capitalise on the growth in emerging markets and seek to manage risk - increasing the value of investment over time
for our shareholders.
Chetan Sehgal
Lead Portfolio Manager
25 November 2019

Statement of Comprehensive Income
For the six months to 30 September 2019



For the six months to
30 September 2019 (unaudited)

Note
Revenue
£’000


Capital
£’000


Total
£’000

Gains/(losses) on investments and foreign exchange

Gains/(losses) on investments at fair value

–

90,470

90,470

Gains/(losses) on foreign exchange

–

(1,251 )

(1,251 )
Revenue

Dividends

52,549

–

52,549

Bank and deposit interest

307

–

307


52,856

89,219

142,075

Expenses

AIFM fee

(2,996 )

(6,990 )

(9,986 )
Other expenses

(1,080 )

–

(1,080 )

(4,076 )

(6,990 )

(11,066 )
Profit/(loss) before finance costs and taxation

48,780

82,229

131,009

Finance costs

(437 )

(1,021 )

(1,458 )
Profit/(loss) before taxation

48,343

81,208

129,551

Tax (expense)/income

5

(3,815 )

256

(3,559 )
Profit/(loss) for the period

44,528

81,464

125,992

Profit/(loss) attributable to equity holders of the Company

44,528

81,464

125,992

Earnings per share

2

17.90 p

32.74 p

50.64 p
Ongoing charges ratio
(a)


1.02 %
(a)
A glossary of alternative performance measures is included in Shareholder Information in the full half-yearly report.
Under the Company’s Articles of Association the capital element of return is not distributable. The total column of this statement
represents the profit and loss account of the Company.
70% of the annual Alternative Investment Fund Manager (“AIFM”) fee and 70% of the finance costs have been allocated to the
capital account.

From 1 July 2018, the annual AIFM fee was reduced from 1% of net assets up to £2 billion and 0.85% of net assets above that
level to 1% of net assets up to £1 billion and 0.85% above that level.

For the six months to
30 September 2018 (unaudited)

Year ended
31 March 2019 (audited)
Revenue
£’000


Capital
£’000


Total
£’000


Revenue
£’000


Capital
£’000


Total
£’000



–

(60,271 )

(60,271 )

–

(3,892 )

(3,892 )
–

(5,994 )

(5,994 )

–

(6,184 )

(6,184 )


43,136

–

43,136

59,230

–

59,230

157

–

157

439

–

439

43,293

(66,265 )

(22,972 )

59,669

(10,076 )

49,593



(3,133 )

(7,311 )

(10,444 )

(5,954 )

(13,892 )

(19,846 )
(986 )

–

(986 )

(1,935 )

–

(1,935 )
(4,119 )

(7,311 )

(11,430 )

(7,889 )

(13,892 )

(21,781 )
39,174

(73,576 )

(34,402 )

51,780

(23,968 )

27,812

(636 )

(1,488 )

(2,124 )

(1,111 )

(2,603 )

(3,714 )
38,538

(75,064 )

(36,526 )

50,669

(26,571 )

24,098

(4,777 )

(507 )

(5,284 )

(5,798 )

(692 )

(6,490 )
33,761

(75,571 )

(41,810 )

44,871

(27,263 )

17,608

33,761

(75,571 )

(41,810 )

44,871

(27,263 )

17,608

12.73 p

(28.50 )p

(15.77 )p

17.26 p

(10.48 )p

6.78 p

0.98 %

1.02 %

Statement of Financial Position
As at 30 September 2019




As at
30 September
2019
£’000
(unaudited)


As at
30 September
2018
£’000
(unaudited)


As at
31 March
2019
£’000
(audited)

Non-current assets

Investments at fair value through profit or loss

2,184,767

2,200,145

2,162,435

Current assets

Trade and other receivables

8,811

7,299

11,612

Cash and cash equivalents

100,287

41,213

73,213

Total assets

109,098

48,512

84,825

Current liabilities

Bank loans

(117,132 )

(124,769 )

(124,844 )
Trade and other payables

(4,703 )

(3,488 )

(2,654 )
Capital gains tax provision

(1,094 )

(1,434 )

(1,578 )
Total current liabilities

(122,929 )

(129,691 )

(129,076 )
Net current liabilities

(13,831 )

(81,179 )

(44,251 )
Total assets less current liabilities

2,170,936

2,118,966

2,118,184

Share capital and reserves

Equity Share Capital

66,582

69,480

68,045

Capital Redemption Reserve

16,087

13,189

14,624

Capital Reserve

1,528,489

1,491,983

1,492,845

Special Distributable Reserve

433,546

433,546

433,546

Revenue Reserve

126,232

110,768

109,124

Equity Shareholders’ Funds

2,170,936

2,118,966

2,118,184

Net Asset Value pence per share
(a)


884.1

821.1

842.5

(a)
Based on shares in issue excluding shares held in Treasury.