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Templeton Emerging Markets' tech transformation

The trust's small-cap and tech stocks have sent it soaring
Templeton Emerging Markets' tech transformation

Templeton Emerging Markets (TEM) has come full circle from an underperforming fund concentrated in mining and resources fund to a stellar performer with large chunks in 'sexy' technology companies under new manager Carlos Hardenberg. Just don’t ask if he’s a value investor.

A look at Templeton’s top 10 holdings two years ago would have revealed a host of miners and natural resources companies. Today, Samsung Electronics (SMSD) makes up 7.1 per cent of assets, Chinese ecommerce giant Alibaba (BABA:NYQ) accounts for 3.4 per cent and Taiwanese electronics company Hon Hai Precision Industry (2317:TAI) and Chinese internet giant Tencent (700:HKG) features too. 

Technology stocks are responsible for much of the recent emerging markets renaissance. The MSCI Emerging Markets index is up 23 per cent in the year to date and rose by 32.6 per cent in the 2016 calendar year, due in large part to the stellar performance of the technology sector, which now accounts for 26.6 per cent of the index.

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