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Templeton positive in 2011

FUND PROFILE: Templeton Emerging Markets Trust has a substantial weighting in the BRIC economies.
January 31, 2011

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)
PRICE638.5pNAV683.38
SIZE OF FUND£2,343.44mPRICE DISCOUNT TO NAV-6.05
No OF SHARES (m):329.91-YEAR PRICE PERFORMANCE33.47%
SET UP DATE12 June 19893-YEAR  PRICE PERFORMANCE57.74%
MANAGER START DATE12 June 19895-YEAR PRICE PERFORMANCE29.29%
TURNOVER1.44TOTAL EXPENSE RATIO1.28%*
VOLATILITY (3 MTH)24.26YIELD0.53%
TRACKING ERROR11.41GEARING100%
SHARPE RATIO1.28MORE DETAILSfranklintempleton.co.uk

Source: Franklin Templeton Investments, Thomson Datastream, Morningstar*

Performance figures as at 28 January 2011.

Top 10 holdings

HoldingPercentage
Brilliance China Automotive6.1
Vale SA6.1
Itau Unibanco Holding SA5.6
Banco Bradesco SA4.8
Akbank TAS4.6
Tata Consultancy Services4.3
Sesa Goa4.1
SK Energy Co3.8
Dairy Farm 3.2
PT Astra International3.2

Geographic Breakdown

CountryPercentage
Hong Kong/China22.5
Brazil19.7
India12.2
Thailand9.8
Indonesia6.8
Turkey6.6
South Korea6.0
Russia5.8
South Africa2.9
Mexico1.9