26th Nov 2018 15:28
LONDON (Alliance News) - Templeton Emerging Markets Investment Trust PLC on Monday reported a decrease in interim net asset value but the trust slightly outperformed its benchmark.
At September 30, Templeton's NAV per share was 821.1p, a 2.3% decrease from 840.7p a year before. At March 31, the trust's NAV was 846.0p.
Templeton's net assets decreased in the first half to GBP2.12 billion from GBP2.33 billion a year before and GBP2.30 billion at March 31.
The London and New Zealand listed trust's NAV total return in the first half was a 1.5% loss, compared to its benchmark, the MSCI Emerging Markets Index, losing 1.8%.
"In the six months under review investors in emerging markets were confronted with geopolitical uncertainty, particularly in the trading relationship between China and the USA. This uncertainty led many investors to seek the relative safety of developed markets, and particularly the USA where rising interest rates and a strengthening currency attracted capital flows," said Chairman Paul Manduca.
The trust declared its first interim dividend, totalling 5.0p per share.
Templeton's portfolio was boosted by Chinese offshore oil and gas company CNOOC, Russian energy company Lukoil and American entertainment technology firm Imax - which added 0.5%, 0.4% and 0.4% to portfolio value, respectively.
The biggest detractor from the portfolio was Brilliance China Automotive, which manufactures and sells cars in China through a joint venture with German car giant BMW AG, taking 0.8% off the portfolio.
Brilliance China Automotive was held back in the period due to China's plans to open-up its auto industry further by removing foreign ownership limits and reducing import tariffs.
Manduca added: "As a general comment, and notwithstanding the market volatility in October and November, your board believes that emerging markets are in good health and issues in countries such as Turkey, Pakistan and Argentina do not reflect the asset class as a whole, and furthermore those countries are small in comparison with the rest of the emerging markets universe."
Shares in Templeton Emerging Markets were up 1.3% at 685.00 pence each on Monday.