Templeton Emerging Markets Investment Trust needs little introduction. Managed by emerging markets veteran, Dr. Mark Mobius, the fund has been around sine June 1989, and has since posted stellar performance for investors and convincingly outperformed the index.
Templeton Emerging Markets Group is one of the pioneers of emerging market investment. Established in 1987, the Group has over 20 years of experience and now manages £35.3bn in emerging markets assets.
The trust seeks long-term capital appreciation though investment in companies operating in emerging markets or stocks listed in stock markets of such countries. Of all the investment trusts focused on the emerging markets space, Templeton has the highest weighting in the BRIC (Brazil, Russia, India and China) economies (over 60 per cent).
For the three months to 31 December 2010, the fund's share price rose 8.7 per cent compared with the MSCI Emerging Markets Index, which rose 8.1 per cent. Over the past five years, the fund has posted a return just shy of 30 per cent.
Dr. Mobius and his team use in-depth company research to find securities in any emerging market country or industry sector, regardless of company size, which they believe are undervalued by the market, but have the potential to increase in value over time.
They consider emerging markets to be in a long bull market and expect it to continue in 2011, saying that even more money is likely to be directed into these markets as investors around the world realise that emerging economies on average are growing three times faster than developed economies, and generally have more foreign reserves and lower debt-to-GDP ratios than their developed counterparts.
Moreover, the search for higher returns in a low interest rate environment coupled with attractive valuations in emerging markets could continue to support equity prices.
Emerging market companies can be more volatile than developed markets and the fund's value could be volatile over the short-term. As such, the fund is better suited to be a long-term holding.
TEMPLETON EMERGING MARKETS INVESTMENT TRUST (TEMIT) | |||
---|---|---|---|
PRICE | 638.5p | NAV | 683.38 |
SIZE OF FUND | £2,343.44m | PRICE DISCOUNT TO NAV | -6.05 |
No OF SHARES (m): | 329.9 | 1-YEAR PRICE PERFORMANCE | 33.47% |
SET UP DATE | 12 June 1989 | 3-YEAR PRICE PERFORMANCE | 57.74% |
MANAGER START DATE | 12 June 1989 | 5-YEAR PRICE PERFORMANCE | 29.29% |
TURNOVER | 1.44 | TOTAL EXPENSE RATIO | 1.28%* |
VOLATILITY (3 MTH) | 24.26 | YIELD | 0.53% |
TRACKING ERROR | 11.41 | GEARING | 100% |
SHARPE RATIO | 1.28 | MORE DETAILS | franklintempleton.co.uk |
Source: Franklin Templeton Investments, Thomson Datastream, Morningstar*
Performance figures as at 28 January 2011.
Top 10 holdings
Holding | Percentage |
---|---|
Brilliance China Automotive | 6.1 |
Vale SA | 6.1 |
Itau Unibanco Holding SA | 5.6 |
Banco Bradesco SA | 4.8 |
Akbank TAS | 4.6 |
Tata Consultancy Services | 4.3 |
Sesa Goa | 4.1 |
SK Energy Co | 3.8 |
Dairy Farm | 3.2 |
PT Astra International | 3.2 |
Geographic Breakdown
Country | Percentage |
---|---|
Hong Kong/China | 22.5 |
Brazil | 19.7 |
India | 12.2 |
Thailand | 9.8 |
Indonesia | 6.8 |
Turkey | 6.6 |
South Korea | 6.0 |
Russia | 5.8 |
South Africa | 2.9 |
Mexico | 1.9 |