RCS - TempletonEmerg.Mkt. - Edison issues update on Templeton IT (TEM)

Templeton Emerging Markets Investment TrustAnnouncement

09/11/2022 07:00

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RNS Number : 7125F  Templeton Emerging Markets IT PLC  09 November 2022

London, UK, 9 November 2022

 

Edison issues update on Templeton Emerging Markets IT (TEM)

Templeton Emerging Markets Investment Trust (TEMIT) has experienced a
difficult period of performance in recent quarters as investors have focused
on the tough macroeconomic backdrop rather than on individual company
fundamentals. However, managers Chetan Sehgal (lead manager) and Andrew Ness
are confident in the long-term strategy of investing in companies with
sustainable earnings power that are trading at a discount to their estimated
intrinsic values. They believe emerging markets are under-owned and
undervalued; hence, it is a compelling time to consider an allocation to the
regions. The global asset allocation to emerging markets is 6.5% versus an
11.0% index weighting, which has declined by 40% over the last 10 years. Also,
in aggregate, the valuation of emerging market shares is almost at a historic
low discount to those in developed markets, while they are very inexpensive
compared with their own history.

 

Investment trust discounts have generally widened this year in an environment
of increased risk aversion. TEMIT is no exception as its 13.1% share price
discount to cum-income NAV is wider than the 11.0% to 12.2% range of average
discounts over the last one, three, five and 10 years. Given the positive
relative growth prospects and attractive valuations of emerging compared with
developed markets, global investors may benefit from an allocation to a large,
well-established emerging market fund that has a clearly defined philosophy
and investment approach, especially when investors return to focusing on
companies with favourable fundamentals rather than trying to anticipate
macroeconomic developments.

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