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Templeton Emerging Markets Investment Trust
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== Performance: Difficult period in FY22<ref name=":2" /> == {| class="wikitable" |+Exhibit 5: Five-year discrete performance data<ref>Source: Refinitiv. Note: All % on a total return basis in pounds sterling.</ref> !12 months ending !Share price (%) !NAV (%) !MSCI Emerging Markets (%) !MSCI World (%) !CBOE UK All Companies (%) |- |31/05/18 |6.4 |7.8 |11.0 |8.8 |6.6 |- |31/05/19 |6.7 |1.0 |(3.2) |5.9 |(3.4) |- |31/05/20 |(1.1) |1.8 |(2.2) |9.5 |(12.0) |- |31/05/21 |44.7 |35.0 |31.8 |22.9 |23.4 |- |31/05/22 |(22.5) |(17.9) |(9.3) |7.8 |8.5 |} In FY22 (ending 31 March), TEMIT’s NAV and share price total returns of -17.3% and -21.2% respectively trailed the benchmark’s -6.8% total return. However, to put this relative performance in context, from its launch in June 1989 to end-March 2022, TEMIT’s NAV +3,813.9% total return is considerably ahead of the benchmark’s +1,792.0% total return. There were three broad issues that negatively affected TEMIT’s performance in FY22: weakness in technology stocks following a multi-year period of outperformance; regulatory pressure on Chinese companies; and the Russian invasion of Ukraine. While the board is concerned by the trust’s recent performance, it is reassured by the depth of resources at the investment manager and the quality of insights the team produces, so is confident TEMIT’s performance will turn around in due course. On a stock-specific basis, the best contributors to the trust’s relative performance in FY22 were ICICI Bank (+1.0pp, India; financials); not holding Meituan (+0.7pp, China/Hong Kong; consumer discretionary); Itaú Unibanco (+0.6pp, Brazil; financials); TSMC (+0.6pp, Taiwan; IT); and non-index stock Bajaj Holdings & Investment (+0.5pp, India; financials). The worst contributors were Alibaba (-1.5pp, China/Hong Kong; consumer discretionary); LUKOIL (-1.5pp, Russia; energy); Yandex (-1.3pp, Russia; communication services); Sberbank of Russia (-1.1pp, Russia; financials); and Brilliance China Automotive (-1.0pp, China/Hong Kong; consumer discretionary), whose shares are suspended following a fraud investigation. Sehgal considers that unless there are further allegations against the company, there is value to be realised in this position, based on an evaluation of its asset base including significant cash on its balance sheet. '''Exhibit 6a: Price, NAV and benchmark total return performance, one-year rebased'''<ref name=":1">Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref> [[File:Image5-993cb9afacc15e915169b44e7bffff85.png|600x600px]] '''Exhibit 6b: Price, NAV and benchmark total return performance (%)<ref name=":1" />'''[[File:Image6-cbe5c8afb342646ed670d571f3814d9e.png|600x600px]] As shown in Exhibits 7 and 8, TEMIT has experienced a difficult period of relative performance over the last 12 months. This has negatively affected its longer-term record and its NAV has lagged the benchmark over the last one, three, five and 10 years, although its share price has been broadly in line over the last five years. {| class="wikitable" |+Exhibit 7: Share price and NAV total return performance, relative to indices (%)<ref>Source: Refinitiv, Edison Investment Research. Note: Data to end-May 2022. Geometric calculation.</ref> ! !One month !Three months !Six months !One year !Three years !Five years !10 years |- |Price relative to MSCI Emerging Markets |4.0 |(3.2) |(7.1) |(14.6) |(5.2) |0.1 |(6.8) |- |NAV relative to MSCI Emerging Markets |2.4 |(1.6) |(5.6) |(9.5) |(3.6) |(2.4) |(5.3) |- |Price relative to MSCI World |4.3 |(4.9) |(8.1) |(28.2) |(23.6) |(24.7) |(51.8) |- |NAV relative to MSCI World |2.8 |(3.4) |(6.6) |(23.9) |(22.3) |(26.6) |(51.0) |- |Price relative to CBOE UK All Companies |3.2 |(6.6) |(17.8) |(28.6) |(5.8) |3.8 |(18.5) |- |NAV relative to CBOE UK All Companies |1.7 |(5.1) |(16.5) |(24.3) |(4.2) |1.2 |(17.1) |} '''Exhibit 8: NAV total return performance relative to benchmark over 10 years<ref>Source: Refinitiv, Edison Investment Research.</ref>'''[[File:Image7-e0e2e4a89cc29b30d5aacdf6acac6b6a.png|600x600px]]
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