Templeton Emerging Markets IT Outperforms Benchmark Amid Global Uncertainties
Why we think this is good
The investment trust has demonstrated strong performance in a challenging global environment. With a NAV total return of 8.8% and share price total return of 13.3%, both outperforming the benchmark's 5.8%, the trust has shown resilience and growth. The narrowing discount to NAV, from 15.4% to 12.4%, indicates improved investor confidence. A 5% increase in dividend and a reduction in the ongoing charges ratio further underscore the trust's solid management. However, the slight decrease in total net assets and increased geopolitical risks, particularly US-China tensions and potential trade disruptions, temper the overall positive outlook. While the trust maintains a positive view on emerging markets, these external factors introduce an element of caution.
Key Points
- NAV total return of 8.8%, outperforming the benchmark's 5.8%
- Share price total return of 13.3%
- Proposed total dividend increased by 5% to 5.25 pence per share
- Discount to NAV narrowed from 15.4% to 12.4%
- Ongoing charges ratio improved to 0.95% from 0.97%
- Total net assets decreased by 2.43% to £1,985.4 million
- Net gearing increased slightly to 0.2% from 0.0%
- Positive outlook on emerging markets despite geopolitical uncertainties
Summary
Templeton Emerging Markets Investment Trust (TEMIT) has delivered a robust performance for the year ended 31 March 2025. The trust's NAV total return of 8.8% and share price total return of 13.3% both outperformed the benchmark's 5.8% return. The trust's financial position remains strong, with net gearing at a low 0.2%. The board has proposed a 5% increase in the total dividend to 5.25 pence per share. The ongoing charges ratio improved to 0.95%, down from 0.97% in the previous year. However, total net assets decreased slightly by 2.43% to £1,985.4 million. The trust maintains a positive outlook on emerging markets, supported by improving macro conditions and structural growth trends, but acknowledges potential headwinds from geopolitical tensions, particularly between the US and China.