Templeton Emerging Markets Smaller Companies Fund W(acc)GBP

Emerging Markets

Rated Fund 2016-19. A smaller companies fund with a strong legacy

Templeton Emerging Markets Smaller Companies won Money Observer’s Best Emerging Markets Fund award in 2015, when times were particularly tough for emerging markets, and made it a hat-trick by lifting the title again in 2016 and 2017. Like many other funds investing in smaller companies in emerging markets, it had a tough year in 2018, but we have high hopes for its manager Chetan Sehgal.

He succeeded emerging markets veteran Mark Mobius as named manager on the fund in April 2017, though he had in fact been doing the heavy lifting on the fund since its launch in 2007.

In managing the fund, Singapore-based Sehgal draws upon a large team of analysts providing support from offices located across the emerging markets world.

The fund invests in 120 companies with market capitalisations at the time of purchase that are within the range of those included in the MSCI Emerging Markets Small Cap index. When choosing which companies to buy, Sehgal follows Templeton’s value-oriented approach – looking for small companies that appear cheap relative to their five years of projected earnings growth.

The process starts by screening a master list of small company stocks to identify higher-quality companies with strong business models, little or no debt, strong management and good corporate governance, trading at attractive valuations.

Next follows in-depth research and scrutiny by a regional review team. This includes undertaking hundreds of company visits each year, which aim to identify smaller companies that may otherwise be overlooked.

Morningstar believes the fund remains a solid o­ffering for investors seeking a more aggressive option in the region.

Narrative and ratings content all as of January 2019.

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Name
Templeton Emerging Markets Smaller Companies Fund W(acc)GBP
Manager
Franklin Templeton International Services S.à r.l.
Type
SICAV
ISIN
LU0768361320
Sector
Global Emerging Markets
Launched
31/05/2012
OCF
1.49 %
Risk Rating
2
3 Year Sharpe
0.78
3 Year Alpha
2.16
Yield
0 %
Benchmark
MSCI EM Small NR USD
The Fund aims to achieve long-term capital appreciation by investing primarily in equity securities and depository receipts of small-cap companies registered or performing a substantial part of their business in emerging markets or holding a substantial part of their participations in small-cap companies registered in emerging markets.
Holding %
Bajaj Holdings and Investment Ltd 4.83 %
Federal Home Loan Banks 0% 3.00 %
Health and Happiness (H&H) International Holdings Ltd 2.86 %
Baozun Inc ADR 2.41 %
Huaxin Cement Co Ltd 2.38 %
Fila Korea Ltd 2.37 %
Hoa Phat Group JSC 2.19 %
Merida Industry Co Ltd 2.04 %
Novatek Microelectronics Corp 1.93 %
Primax Electronics Ltd 1.89 %
Region %
Asia - Emerging 45.84 %
Asia - Developed 29.70 %
Latin America 7.52 %
Sector %
Consumer Cyclical 23.48 %
Technology 16.45 %
Financial Services 14.17 %
Healthcare 13.31 %
Consumer Defensive 11.29 %
Basic materials 10.91 %
Industrials 8.53 %
Name
Franklin Templeton International Services S.à r.l.
Address
L-1246, Luxembourg, Luxembourg
UCITS
Yes
Legal Structure
SICAV

Managers

Chetan Sehgal
Joined 04/03/2017

Data provided by Morningstar.

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