Templeton Emerging Markets Investment Trust CAPITALISE ON TRANSFORMATIONAL GROWTH Image for illustrative purposes only
Capitalise on Emerging Market Transformation with Templeton Emerging Markets Investment Trust (TEMIT) Rapid economic growth in emerging markets since the 1980s has transformed what was once a niche asset class into a critically important one representing the economic forces poised to shape global growth in the 21st century. Emerging market economies in countries such as China and Peru are generally growing at a much faster rate than more developed markets such as the US or UK. This exciting growth potential can be accessed through the UK s largest emerging markets investment trust, TEMIT. 1 What Is an Emerging Market? An emerging market is a country listed by the World Bank as having low-to-middle income levels per person, or a country with an underdeveloped stock market. Emerging markets tend to be located in Asia, Africa, Eastern Europe and Latin America and include countries such as Brazil, China, India, Indonesia, Russia, South Korea, Thailand and Turkey. Emerging markets can carry a higher degree of risk than developed markets. Why Invest in Emerging Markets? Over 80% of the global population lives outside the developed world. Per person Gross Domestic Product (GDP) growth of the emerging world is far higher than the developed world. The impact of billions of consumers generating strong growth could radically reshape the global economy in coming decades. Rising incomes in growing cities are already creating abundant new opportunities for emerging market investors. Favourable demographics and burgeoning urban consumer classes are spurring demand which is creating lucrative markets for many consumerfacing companies. EMERGING MARKETS NOW DOMINATE GLOBAL GROWTH Share of Global GDP Growth 2 37% 49% 66% 70% 34% 1987 63% 70% 1997 51% 60% 2007 43% 2017E 30% 35% Emerging Markets Developed Markets 1. TEMIT is the largest trust in the AIC Investment Trust Global Emerging Markets sector. Source: The Association of Investment Companies (AIC) as at 31/03/16. 2. Source: IMF World Economic Outlook Database, April 2016. Copyright 2016. By International Monetary Fund. All rights reserved. 1 Templeton Emerging Markets Investment Trust www.franklintempleton.co.uk/temit
Transform Your Portfolio with TEMIT In 1980, five countries were available to investors as emerging markets. Today there are more than 60. While investors still see emerging markets as a single asset class, these countries vary greatly in their development, politics and the types of companies that drive their economies. As emerging markets evolve, so does the complexity of finding the best investment ideas. That s why we analyse each opportunity uniquely within the context of its relevant market. Government policy, economic infrastructure and personal income levels of a given market can all shape the fortunes of specific companies. How that investment compares to others in the region or across the globe is equally important. Local, on-theground insight is critical for identifying the right companies, capable of navigating the opportunities and challenges in these increasingly diverse economies. A global perspective provides a broader view of a company s prospects for the future. Templeton Emerging Markets Investment Trust Company Characteristics As at 31 March 2016 Lead Manager Carlos Hardenberg Launch Date 12/06/1989 Can be held in an ISA or SIPP Fund Size 1.56 billion Benchmark MSCI Emerging Markets Index Summary of Investment Objective TEMIT seeks long-term capital appreciation through investment in companies operating in emerging markets or whose stocks are listed on the stock markets of such countries. TEMIT may be appropriate for investors who want to invest in emerging markets and are willing to take some risk to their capital for the potential of strong growth over the long term. Emerging market companies can be more volatile than developed markets and an investment in TEMIT could occasionally change in value significantly over the short term. Why Consider TEMIT? Exciting Potential. Emerging markets encompass some of the fastest growing and most dynamic countries in the world. Proven Approach. Using detailed research and a tried and tested investment philosophy, the management team looks beyond the benchmark to securities of companies they believe are undervalued but with the potential to grow in value. When picking emerging market stocks, the management team is free to invest regardless of company size, industry sector or geographical location. Expert Team. Our team of professionals is based in 20 countries with a wealth of specialist emerging market experience. We believe investors interests are best served by being on the ground understanding the culture, language and local dynamics, reviewing companies first hand, rather than just from behind a computer screen. We believe active, informed portfolio management is the best way for investors to capitalise on transformational growth in emerging markets. www.franklintempleton.co.uk/temit Templeton Emerging Markets Investment Trust 21
Over 25 Years of Investment Success TEMIT Performance The Templeton Emerging Markets Group has used the same tried and tested investment approach to manage TEMIT since it was launched in June 1989. They believe it has been instrumental in achieving TEMIT s impressive long-term track record. If you had invested 1,000 at launch and reinvested the dividend payments, it would now be worth over 16,000. You should remember that past performance is not a guide to future performance. Overseas investments are subject to currency fluctuations and emerging markets may be more volatile then established markets. The value of your investment and income from them can go down as well as up and you may get back less than invested. THE GROWTH OF 1,000 INVESTED IN TEMIT 3 Since launch to 31 March 2016 Performance (GBP) Rebased to 1,000 30000 25000 20000 15000 10000 5000 0 16,880 9,740 1989 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 TEMIT Share Price MSCI Emerging Markets Index DISCRETE ANNUAL PERFORMANCE 4 31.03.16 31.03.15 31.03.14 31.03.13 31.03.12 TEMIT (Share Price) -17.0% 6.9% -16.8% 10.0% -10.2% MSCI Emerging Markets Index -8.8% 13.2% -9.9% 7.7% -8.2% 3. Source: Franklin Templeton Investments as at 31/03/16. Performance is calculated in GBP net of UK basic rate tax. Past performance is not a guide to future performance. Please visit www.franklintempleton.co.uk/temit for current performance. Indices are unmanaged and one cannot invest directly in an index. 4. Source: Franklin Templeton Investments. Table showing past five years discrete annual performance to 31/03/16 of TEMIT and index. 23 Templeton Emerging Markets Investment Trust www.franklintempleton.co.uk/temit
Investment Management Team From the 1 October 2015, Carlos Hardenberg become lead manager with the support of Mark Mobius and Chetan Sehgal. Carlos is supported by the Templeton Emerging Markets Group, which was established in 1987 and is one of the pioneers of emerging markets investing. The Group is one of the largest of its kind and has a presence in 20 research offices around the world and includes 52 dedicated emerging markets portfolio managers, analysts and product specialists. Together on average, each of the Group s investment professionals has over 15 years of relevant industry experience, and has been with the company for over 11 years. How is TEMIT Managed? The investment management team, led by Carlos Hardenberg uses in-depth company research to find securities in any emerging market country or industry sector, regardless of company size, that they believe are undervalued by the market but have the potential to increase in value over time. Using a time-tested investment philosophy and a long-term approach to value-oriented investing, the investment team look beyond short-term news, noise and emotion to identify the most compelling investment opportunities available. By spanning the globe, our investment managers also bring a local perspective to investment opportunities. From Shanghai to South Africa and from Latin America to Eastern Europe, they are on the ground, meeting the management teams behind some of the most exciting investment opportunities in the world today. Our emerging markets team isn t too keen on following crowds. Part and parcel of Templeton s contrarian approach is travelling to places others aren t, and thinking about the long-term potential in specific industries and companies that may not be on others radar screens. MARK MOBIUS, PH.D. Executive Chairman Templeton Emerging Markets Group Our performance is measured against the MSCI Emerging Markets Index for reporting purposes, but there is no requirement for the investment management team to invest in the same companies or in the same amount as the index. TEMIT s performance or portfolio positioning may therefore be very different to the index. Shareholders in TEMIT should consider it as a long-term financial commitment. Please refer to the latest annual report for more details of the risks associated with an investment in TEMIT. www.franklintempleton.co.uk/temit Templeton Emerging Markets Investment Trust 43
Actively Pursuing Opportunities on the Ground, Across the Globe 5 Our global views are based on our on the ground research into companies, enabling a truly local perspective. We believe active, informed portfolio management is the best way for investors to capture opportunities across this increasingly diverse set of nations. Our local presence in emerging markets helps us to understand and see the transformational growth potential in these exciting markets. 20 EMERGING MARKETS OFFICES 52 INVESTMENT PROFESSIONALS Mexico City Frankfurt London Vienna Bucharest Istanbul Moscow Warsaw Dubai Mumbai Bangkok Ho Chi Minh City Hong Kong Kuala Lumpur Seoul Shanghai Singapore Buenos Aires Rio de Janeiro Cape Town 5. Source: Franklin Templeton Investments as at 31/03/16 54 Templeton Emerging Markets Investment Trust www.franklintempleton.co.uk/temit
An Actively Managed Fund with a Diverse Portfolio 10 LARGEST COUNTRY HOLDINGS BREAKDOWN VS BENCHMARK As at 31 March 2016 Hong Kong/China South Korea Brazil India Taiwan Thailand Indonesia United Kingdom South Africa Pakistan 0 5 10 15 20 25 30 35 TEMIT MSCI Emerging Markets Index TOP 10 HOLDINGS As at 31 March 2016 Security Sector Country % of Total Assets Brilliance China Automotive Holdings Ltd. Consumer Discretionary China 5.9% Unilever Consumer Staples United Kingdom 5.0% Samsung Electronics Information Technology South Korea 4.5% Taiwan Semiconductor Manufacturing Information Technology Taiwan 3.6% MCB Bank Financials Pakistan 3.4% Astra International Consumer Discretionary Indonesia 3.1% Banco Bradesco, ADR Financials Brazil 2.9% Tencent Holdings Information Technology Hong Kong/China 2.9% Itau Unibanco Holding SA, ADR Financials Brazil 2.9% Naspers, N Consumer Discretionary South Africa 2.3% Total 36.5% www.franklintempleton.co.uk/temit Templeton Emerging Markets Investment Trust 65
Investor Suitability TEMIT may be appropriate for investors who want to invest in emerging markets and are willing to take some risk to their capital for the potential of strong growth over the long term. Emerging market companies can be more volatile than developed markets and an investment in TEMIT could occasionally change in value significantly over the short-term. The price of shares in TEMIT and income from them can go down as well as up and you may not get back the full amount that you invested. Shareholders in TEMIT should therefore consider it as a long-term financial commitment. Please refer to the latest annual report for more details of the risks associated with an investment in TEMIT. This document does not constitute or form part of an offer for shares or an invitation to apply for shares. Ways to Invest You can invest in directly through a stockbroker. TEMIT can also be held in a tax-efficient stocks and shares Individual Savings Account (ISA) or a self-invested personal pension (SIPP). An investment in TEMIT entails risks which are described in the current Annual Report. Please consult a financial adviser before deciding to invest. Value of Advice Before making investment decisions, we suggest you contact a financial adviser. Every investor s goals are unique and proper guidance towards the most suitable products is essential. Nearly every investment entails special risks that should be discussed with an experienced professional. For further information, speak to your financial adviser or contact our office. Franklin Templeton Investment Management Limited Cannon Place 78 Cannon Street London EC4N 6HL tel 0800 305 306 email enquiries@franklintempleton.co.uk www.franklintempleton.co.uk/temit IMPORTANT INFORMATION Performance figures are not based on audited financial statements and, unless indicated otherwise, assume reinvestment of interest and dividends. Data from third-party sources may have been used in its preparation and Franklin Templeton Investments has not independently verified, validated or audited such data. A copy of the latest annual report and semi-annual report, if published thereafter, can be found on our website: www. franklintempleton.co.uk/temit or can be obtained, free of charge, from the address below. For more information please contact: Franklin Templeton Investments, Cannon Place, 78 Cannon Street, London EC4N 6HL. Telephone: 0800 305 306, Email: enquiries@franklintempleton.co.uk. Issued by Franklin Templeton Investment Management Limited (FTIML). FTIML is authorised and regulated by the Financial Conduct Authority. 2016 Franklin Templeton Investments. All rights reserved. TEMIT CONSBR 03/16