Quarterly Portfolio Insight R

RNS Number : 9089P

Templeton Emerging Markets IT PLC

26 July 2010

 

 

A full pdf version of this report is attached to this announcement.

Templeton Emerging Markets Investment Trust PLC

Quarterly Portfolio Insight

Three months to 30 June 2010

Summary of investment objective

The Company seeks long-term capital appreciation through investment in companies operating in emerging markets or whose stocks are listed on the stock markets of such countries.

Company characteristics (30/06/10)

Fund launch date                                        12/06/1989

Benchmark                                                 MSCI Emerging Markets Index (in £)

Lead manager                                             Mark Mobius

Total Net Assets                                         £1.85b

Market Capitalisation                                  £1.74b

Gearing                                                      100.0%

TER                                                           1.29%

Pricing information (30/06/10)

NAV (Cum-Income)                                  560.1p

Share price                                                 528.0p

Discount to NAV (Cum-Income)                5.7%

Current Yield (net)                                      1.1%

Pricing information (Cum-income-12 months to 30/06/10)

Highest NAV                                             638.0p

Lowest NAV                                             229.1p

Highest share price                                     596.5p

Lowest share price                                     207.5p

For the most up-to-date information, please visit www.temit.co.uk.

Market Overview (All figures are based in sterling)

·    The second quarter of 2010 began on a positive note, with markets cheering the strong economic recovery in major emerging markets. However, weakness in European economies, the implementation of tightening measures in China (more specifically, in its property market), and lower commodity prices led global markets to correct in the latter part of the period.

·    Another critical element was the large amount of Initial Public Offerings (IPOs) being made in emerging markets. During the second quarter alone, US$34 billion was raised. In the first six months of 2010, US$64 billion was raised. This was more than 70% of the US$89 billion raised all of last year. This increase in IPO activity has the effect of drawing money away from the cash market and thus dampening prices. Within this environment, the MSCI Emerging Markets Index ended the three-month period with a 7% decline in sterling terms.

·    In Asia, China announced that it would increase the flexibility of the renminbi. As such, we expect to see a gradual appreciation in China's exchange rate. During the quarter, the renminbi rose by about 1% against both the US dollar and euro. Elsewhere, the G20 summit was held in Canada in June, where global leaders agreed to focus on reducing public debt and government deficits.

·    In June, global attention was diverted to South Africa, with the commencement of the FIFA World Cup. This is the first time that the World Cup has ever been held in the continent of Africa, and the fact that it is in South Africa could enhance the country's image and improve the world's perception of South Africa, as well as potentially attract more tourists and investors to the region.

Investment Outlook

In the face of uncertainty surrounding the global economic recovery and financial stability of Greece, Spain, Portugal, Ireland and other countries in Europe, emerging markets continue to display strong financial and economic fundamentals. Many emerging markets recorded strong gross domestic product growth rates in the first quarter of 2010, driven by robust domestic demand and the implementation of government stimulus measures. Foreign reserves also remained high, allowing emerging markets to weather external financial shocks. Of course, that is not to say that stock markets in emerging economies are immune from the volatility in global markets. However, we believe that these short-term corrections provide investors with attractive entry points as valuations drop to attractive levels. Taking a long-term view, we believe emerging markets continue to offer investors with a compelling investment opportunity.

Performance

·    For the three months to 30 June 2010, TEMIT's share price fell 7.9% compared to the MSCI Emerging Markets Index, which fell 7.0%¹. Please note that past performance is not a guide to future performance.

Cumulative Performance¹

30 June 2010

Past performance is not a guide to future performance.

	3 Months	6 Months	Year To Date	1 Year	3 Years	5 Years	Since Launch
TEMIT (NAV)	-9.2%	1.1%	1.1%	44.5%	39.9%	159.5%	1,970.3%*
TEMIT (Share Price)	-7.9%	1.5%	1.5%	44.5%	49.6%	190.7%	1,785.9%**
MSCI Emerging Mkts Index	-7.0%	1.4%	1.4%	35.9%	25.4%	121.4%	868.3%**

*NAV price is calculated from 31/07/89 (the first available date). **Share price and index are calculated from 12/06/89 (TEMIT's launch date).

Discrete Annual Performance¹

To end of June each year

Past performance is not a guide to future performance.

	30/06/09 to 30/06/10	30/06/08 to 30/06/09	29/06/07 to 30/06/08	30/06/06 to 29/06/07	30/06/05 to 30/06/06
TEMIT (NAV)	44.5%	-8.7%	6.1%	40.4%	32.1%
TEMIT (Share Price)	44.5%	-7.4%	11.8%	48.7%	30.7%
MSCI Emerging Mkts Index	35.9%	-12.8%	5.7%	34.1%	31.7%

 

Geographic Information

Geographic Allocation²

30 June 2010

	TEMIT
Emerging Markets	98.4%
Frontier Markets	1.6%
Developed Markets	0.0%

Regional Weightings vs. Benchmark (%)²

30 June 2010

	TEMIT	MSCI Emerging Markets Index
Asia	59.2%	59.3%
L. America/Caribbean	21.4%	22.6%
Europe	16.4%	10.1%
Mid-East/Africa	2.5%	7.9%

10 Largest Country Weightings vs. Benchmark (%)²

30 June 2010

	TEMIT	MSCI Emerging Markets Index
Hong Kong / China	20.9%	19.1%
Brazil	19.4%	15.4%
India	14.1%	8.4%
Thailand	9.4%	1.5%
Indonesia	8.1%	2.4%
Turkey	7.2%	1.6%
Russia	5.6%	6.3%
South Korea	4.8%	13.6%
South Africa	2.5%	7.2%
Mexico	2.0%	4.4%

Largest contributors and detractors to performance³

1 April 2010 - 30 June 2010
Past performance is not a guide to future performance.

Top Country Contributors		Top Country Detractors
Country	Contribution	Country	Contribution
Indonesia	0.9%	Brazil	-3.8%
Hong Kong	0.1%	India	-1.6%
Thailand	0.1%	Russia	-1.1%
		South Korea	-1.0%
		China	-0.6%

Sector Information

Sector Weightings vs. Benchmark (%)²

30 June 2010

	TEMIT	MSCI Emerging Markets Index
Financials	27.4%	25.6%
Energy	25.0%	14.1%
Materials	20.4%	14.2%
Consumer Discretionary	10.7%	6.4%
Information Technology	7.7%	13.0%
Consumer Staples	5.2%	6.8%
Industrials	3.1%	6.9%
Healthcare	0.0%	0.8%
Telecommunication Services	0.0%	8.4%
Utilities	0.0%	3.8%

Sector Overweights/Underweights vs. Benchmark (%)²

30 June 2010

	Overweight/Underweight Benchmark
Energy	10.9%
Materials	6.2%
Consumer Discretionary	4.3%
Financials	1.8%
Healthcare	-0.8%
Consumer Staples	-1.6%
Industrials	-3.8%
Utilities	-3.8%
Information Technology	-5.3%
Telecommunication Services	-8.4%

Largest contributors and detractors to performance³

1 April 2010 - 30 June 2010

Past performance is not a guide to future performance.

Top Sector Contributors		Top Sector Detractors
Sector	Contribution	Sector	Contribution
Consumer Discretionary	0.6%	Materials	-4.5%
		Energy	-2.6%
		Financials	-1.4%
		Industrials	-0.7%
		Information Technology	-0.1%

 

TEMIT Holdings

10 Largest Equity Issuers⁴

30 June 2010

Security	Sector	Country	% of total assets
Sesa Goa Ltd.	Materials	India	5.6%
Vale SA, ADR, pfd. A	Materials	Brazil	5.6%
Itau Unibanco Banco Multiplo SA, ADR	Financials	Brazil	5.6%
Akbank TAS	Financials	Turkey	5.2%
Banco Bradesco SA, ADR, pfd	Financials	Brazil	4.6%
PT Astra International Tbk	Consumer Discretionary	Indonesia	3.7%
Petroleo Brasileiro SA, ADR, pfd.	Energy	Brazil	3.6%
Tata Consultancy Services Ltd	Information Technology	India	3.5%
Brilliance China Automotive holdings Ltd.	Consumer Discretionary	China	3.4%
PetroChina Co. Ltd.	Energy	China	3.2%
TOTAL			44.0%

Portfolio Turnover Rate⁵

12 months to 30 June 2010

Portfolio Turnover Rate (annualised)

4%

Market Capitalisation Breakdown⁵

As at 30 June 2010

	Less than £1.5bn	£1.5bn to £5bn	Greater than £5bn	Unavailable
Market Capitalisation	10.9%	23.1%	55.1%	10.9%

Largest Contributors and Detractors to Performance

Top Security Contributors⁴

1 April 2010 - 30 June 2010

Past performance is not a guide to future performance.

Security	Sector	Country	Contribution
Astra International	Consumer Discretionary	Indonesia	0.6%
Brilliance China Automotive Holdings Ltd.	Consumer Discretionary	China	0.4%
Oil & Natural Gas Corp. Ltd	Energy	India	0.3%
Bank Central Asia	Financials	Indonesia	0.2%
Dairy Farm International Holdings Ltd.	Consumer Staples	Hong Kong	0.2%

Top Security Detractors⁴

1 April 2010 - 30 June 2010

Past performance is not a guide to future performance.

Security	Sector	Country	Contribution
Itau Unibanco Banco Multiplo SA, ADR	Financials	Brazil	-1.0%
Petroleo Brasileiro SA, ADR, pfd.	Energy	Brazil	-0.9%
Hyundai Development Co.	Industrials	South Korea	-0.6%
Banco Bradesco SA, ADR, pfd	Financials	Brazil	-0.6%
SK Energy Co. Ltd.	Energy	South Korea	-0.5%

Significant Purchases and Sales⁴

1 April 2010 - 30 June 2010

Significant Purchases

MCB (Existing holding)-Pakistan's fourth largest bank.
Buy reason: Attractive valuation and relatively high return on equity.

Peninsula Land(Existing holding)-Indian real estate developer based in Mumbai.
Buy reason: The company's developments are expected to be strong beneficiaries given the scarce supply of commercial space in the Central and Southern Mumbai business districts.

Significant Sales

There were no sales transactions undertaken during the second quarter of 2010.

Statistics

Fundamental Porfolio Characteristics⁶

30 June 2010

Past performance is not a guide to future performance.

	Price to Earnings	Price to Book Value	Price to Cash Flow	Dividend Yield	Market Cap (Millions)
TEMIT (Weighted Average)	13.3x	2.1x	8.0x	2.2%	£14,990
MSCI Emerging Markets Index (Weighted Average)	14.6x	1.9x	8.6x	2.2%	£23,504

Risk Statistics⁷

30 June 2010

Past performance is not a guide to future performance.

	1 Year	3 years (annualised)
Annualised Alpha	0.4	0.5
Beta	1.1	1.1
Annualised Downside Risk	7.7	10.2
Information Ratio (Relative)	0.2	0.2
R2	0.9	0.9
Sharpe Ratio	0.5	0.1
Annualised Tracking Error	8.5	9.1
Annualised Volatility	23.1	33.5
Maximum Gain	56.8	149.3
Maximum Loss	-8.0	-50.5
Negative Months	4	15
Positive Months	8	21

Investment Style

·    The Investment Manager and his team use in-depth company research to find securities in any emerging market country or industry sector, regardless of company size, that they believe are undervalued by the market, but have the potential to increase in value over time.

·    Templeton Emerging Markets Investment Trust PLC (TEMIT) is actively managed, aiming to invest in those securities that the Investment Manager believes have the best potential to grow in value over a five year period. Although performance is measured against the MSCI Emerging Markets Index for reporting purposes, there is no requirement for the Investment Manager to invest in the same companies or in the same amount as the index. TEMIT's performance or portfolio positioning may therefore be very different to the index.

·    TEMIT invests in emerging markets; these markets can experience significant and sudden changes in price and can carry a higher degree of risk than developed markets. An investment in TEMIT should be considered as long-term.

Investment Manager and Team

Mark Mobius, Ph.D., Executive Chairman of Templeton Asset Management Ltd is the Head of the Templeton Emerging Markets Team.

The Templeton Emerging Markets Team is one of the pioneers of emerging market investment. Established in 1987, the Team has over 20 years of experience and now manages £23.2 billion in emerging markets assets for retail, institutional and professional investors across the globe (as at 30/06/10)

The Templeton Emerging Markets Team is one of the largest of its kind and has a presence in 16 offices around the world.
The Team includes 45 dedicated emerging markets portfolio managers, analysts and product specialists; senior members of the Team include Allan Lam, Tom Wu, Dennis Lim, Carlos Hardenberg, Grzegorz Konieczny and Gustavo Stenzel. Together. On average, each of the Team's investment professionals has over 11 years of relevant industry experience, and has been with the company for over 8 years (all information as at 30/06/10). Between them, the team speak 25 different languages and dialects (as at 30/04/10).

Investor Suitability

TEMIT may be appropriate for investors who want to invest in emerging markets and are willing to take some risk for the potential of strong capital growth over the long term.

Emerging market companies can be more volatile than developed markets and an investment in TEMIT could occasionally change in value significantly over the short-term. Shareholders in TEMIT should therefore consider it as a long-term financial commitment.

Please refer to the latest annual report for more details of the risks associated with an investment in TEMIT.

Glossary of Terms

Alpha - Alpha measures the difference between a portfolio's actual returns and its expected performance, given its level of risk (as measured by beta). A positive alpha means that the portfolio has over performed, a negative alpha means the portfolio has under performed; for example, an alpha of 1.0 means the portfolio outperformed the market 1.0%.

Beta - Beta is a measure of a portfolio's sensitivity to market movements. It measures the relationship between a portfolio's excess return over an investment in a risk-free investment such as cash (we have used a return of 3.5%) and the excess return of the benchmark index. For TEMIT, this is the Investment Trusts Global Emerging Markets Universe. By definition, the beta of the benchmark (in this case, an index) is 1.00. Accordingly, a portfolio with a 1.10 beta has performed 10% better (after deducting the cash rate) than the index in up markets and 10% worse in down markets, assuming all other factors remain constant. A portfolio with a high beta will tend to move more than the benchmark, a portfolio with a low beta will tend to move less.

Contributor - The amount an individual stock, country or sector has added to the performance of the entire portfolio for a given period.

Cumulative Performance - The percentage increase or decrease of a portfolio's share price or NAV over a given time period, with net income (dividends) reinvested. The fund's performance is usually benchmarked against either a relevant index or sector.

Detractor - The amount an individual stock, country or sector has subtracted from the performance of the entire portfolio for a given period.

Discrete Annual Performance - The percentage increase or decrease of a portfolio's share price or NAV over a complete 12 month period, with net income (dividends) reinvested. The fund's performance is usually benchmarked against either a relevant index or sector.

Dividend Yield - The yield a company pays out to its shareholders in the form of dividends. It is calculated by the dividends paid per share over a year divided by the stock's price. For a vehicle like TEMIT, which invests in a number of companies, this figure represents the weighted average annual dividend paid by all of the companies in which it invests. Because of share types, fees and other considerations, the dividend yield quoted here should not be used as an indication of the income to be received from this portfolio.

Downside Risk - Downside risk is a measurement which only considers negative returns. It is calculated as a downside deviation of returns below the Risk Free Rate (this is the amount a manager could expect to receive by investing in a "risk free" asset, such as with a cash deposit).

Gearing - Gearing (sometimes described as leverage)- a term used to describe the process of borrowing money for investment purposes in the expectation that the returns on the investments purchased using the borrowings exceeds the costs of those borrowings. It illustrates the effect that current prior charges may have on the value of the shareholder funds if the total assets were to rise or fall. A figure of 115 means that the shareholder funds are 15% geared and indicates the extra amount by which the shareholder funds would rise or fall if the total assets were to rise or fall. A figure of 100 means there is no gearing.

Information Ratio - This ratio divides the annualised average return for the portfolio by the Tracking Error (Relative). The higher the ratio, the better, as it reflects the extent to which a portfolio has outperformed the benchmark.

Market Capitalisation - The total market value of a company's shares. For a vehicle like TEMIT, which invests in a number of companies, this is calculated by the share price on a certain date multiplied by the number of shares in issue.

Market Cap (average) - The weighted average of all the companies in which it invests.

Maximum Gain - The best possible investment period in the period analysed. This includes temporary down periods.

Maximum Loss - The worst possible investment period in the period analysed. This includes temporary up periods.

NAV - Net Asset Value, or the total value of the portfolio at any one time, including all shares and cash, divided by the number of shares in issue.

Portfolio Turnover Rate - The frequency with which assets within a portfolio are bought and sold by the manager. Portfolio turnover is calculated by taking either the total amount of new securities purchased or the amount of securities sold - whichever is less - over a particular period, divided by the total net asset value (NAV) of the portfolio. The measurement for a 12-month time period.

Positive & Negative Periods - This shows how many positive/negative months returns that a portfolio experiences across a period.

Price to Book (P/B) - The price per share of a stock divided by its book value (i.e. net worth) per share. For a portfolio, the ratio is the weighted average price/book ratio of the stocks it holds.

Price to Cash Flow (P/CF) - Supplements price/earnings ratio as a measure of relative value; it represents a weighted average of the price/cash flow ratios for the underlying portfolio holdings.

Price to Earnings (P/E) - The share price of a stock, divided by its per-share earnings over the past year. For a portfolio, it is the weighted average P/E ratio of the stocks in the portfolio. P/E is a good indicator of market expectations about a company's prospects; the higher the P/E, the greater the expectations for a company's future growth in earnings.

R2 - R2 or R squared, is an indication of how closely aligned the portfolio and the benchmark index are. R2 ranges between 0 and 1, with 0 indicating a lot of difference and 1 indicating a perfect match. A value of 0.7 and upwards generally suggests that a portfolio's performance is very closely linked to the performance of the benchmark index.

Share Price - The cost of a unit of ownership in a company as purchased through the stock exchange.

Sharpe Ratio - Sharpe Ratio judges whether the relationship between a portfolio's risk and its return is good or bad. The underlying assumption is that a portfolio manager could invest in a riskless asset (such as cash), therefore the return of the risk free asset is deducted from the annualised average return. This net return is then divided by the total risk (annualised volatility). The higher the ratio the better the return for investors for the risk taken.

Total Net Assets - The total value of a company's shares. For a vehicle like TEMIT, which invests in a number of companies, this is calculated by the Net Asset Value (NAV) on a certain date multiplied by the number of shares in issue.

Tracking Error (Relative) - Tracking Error (Relative) measures how much the return of the portfolio deviates from the benchmark index. The lower the tracking error of the portfolio, the more it resembles the benchmark in terms of risk and return characteristics.

Trust - A Trust, or Investment Trust, is a closed ended vehicle investing in a wide variety of underlying investments. Investment Trusts are traded in exactly the same way as any other equity on the London Stock Exchange. The price at which they are traded (share price) depends on the demand for the shares in the investment trust and is often at a variance with the value of their underlying holdings (or NAV).

Volatility - This is a statistical measure of the amount of movement in the price of a share or portfolio over a given period of time. If a portfolio's share price hardly moves over time, it is said to have a low volatility. Volatility is a simple measure of the consistency of returns.

Important Information

1.   Performance is calculated NAV-NAV, GBP net of UK basic rate tax and gross of fees. Source: ©Morningstar as at 30/06/10. Past performance is not a guide to future performance. Emerging markets can carry a higher degree of risk than developed markets.

2.   Source for the Company's "Split Between Markets", "Geographic Information" and "Sector Information", Franklin Templeton Investments as at 30/06/10. Holdings of the same issuer have been combined. Weightings as percent of equity. Source for the benchmark's "Geographic Information" and "Sector Information", MSCI, as at 30/06/10. Geographic split between "Emerging Markets", "Frontier Markets" and "Other" are as per MSCI index classifications. The MSCI Index, the primary benchmark for this Company, is an equity index calculated by Morgan Stanley Capital International (MSCI). The index measures the total return (gross dividends are reinvested) of equity securities available to foreign (nonlocal) investors in the relevant geographic region as reflected in the name of the index or as defined by MSCI. Securities included in the index are weighted according to their Free Float adjusted market capitalisation (Price*Shares outstanding*Foreign Inclusion Factor).

3.   Source for Country and Sector "Top Contributors and Detractors to Performance", FactSet Research System, Inc. as at 30/06/10. Profile data is calculated as a percentage of total. Holdings of the same issuer have been combined.

4.   For the "10 Largest Equity Issuers", please note that top ten equity holdings information is historical and may not reflect current or future composite characteristics. All holdings are subject to change. Holdings of the same issuers have been combined. The information provided is not a recommendation to purchase, sell, or hold any particular security. The securities identified do not represent the Company's entire holdings and in the aggregate may represent only a small percentage of such holdings. There is no assurance that securities purchased will remain in TEMIT, or that securities sold will not be repurchased. In addition, it should not be assumed that any securities mentioned were or will prove to be profitable. Stocks mentioned in this report are not a solicitation to purchase those stocks, and are for example purposes only.
The portfolio manager for TEMIT reserves the right to withhold release of information with respect to holdings that would otherwise be included in a top 10 holdings list.
"Top Security Contributors" and "Top Security Detractors" are holdings based on the last 3 months period. These securities do not represent all the securities purchased, sold or recommended, and the reader should not assume that investment in the security listed was or will be profitable. Holdings are subject to change, holdings of the same issuer have been combined. The information provided is not a recommendation to purchase, sell or hold any particular security. Source for "Top Security Contributors" and "Top Security Detractors": FactSet Research System, Inc. three months as at 30/06/10. Profile data is calculated as a percentage of total. Holdings of the same issuer have been combined.

5.   Source for "Portfolio Turnover Rate" and "Market Capitalisation Breakdown", Franklin Templeton Investments as at 30/06/10.

6.   Source for "Fundamental Portfolio Characteristics", FactSet Research System, Inc. as at 30/06/10. The Price to Earnings, Price to Cash Flow and Price to Book Value calculations shown herein use harmonic means. Values less than 0.01 (i.e. negative value) are excluded and values in excess of 200x are capped at 200x. Yields above 100% are also excluded. For the benchmarks, no limits are applied to these ratios in keeping with the benchmark's calculation methodology. Market capitalisation statistics are indicated in the base currency for the portfolio presenter.

7.   Source for "Risk Statistics" ©Morningstar as at 30/06/10. Total return, annualised ratios (30/06/10). Statistics calculated using a "risk free rate" at 1.0% and the Investment Trusts Global Emerging Markets universe as a benchmark

Copyright © 2010 Franklin Templeton Investments. All rights reserved.

© 2010 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; an (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

The price of shares in TEMIT and income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not an indicator nor a guarantee of future performance. Currency fluctuations will affect the value of overseas investments. When investing in a fund denominated in a currency other than sterling, your performance may also be affected by currency fluctuations. In emerging markets, the risks can be greater than in developed markets. The Fund primarily invests in equities, which may result in the returns being more volatile than other investments such as cash or bonds.

This document does not constitute or form part of an offer for shares or an invitation to apply for shares. An investment in this Company entails risks which are described in the current Annual Report document. Please consult your professional adviser before deciding to invest. Performance figures are not based on audited financial statements and, unless indicated otherwise, assume reinvestment of interest and dividends. Data from third party sources may have been used in its preparation and Franklin Templeton Investments has not independently verified, validated or audited such data. A copy of the latest annual report and semi-annual report, if published thereafter can be found, on our website: www.temit.co.uk or can be obtained, free of charge, from Franklin Templeton Investments, The Adelphi, 1-11 John Adam Street, London, WC2N 6HT.

References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged and one cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton fund. The indices include a greater number of securities than those held in the portfolio.

Due to data limitations all equity holdings are assumed to be the primary equity issue (usually the ordinary or common shares) of each security's issuing company. This methodology may cause small differences between portfolio's reported characteristics and the portfolio's actual characteristics. In practice, Franklin Templeton's portfolio managers invest in the class or type of security which they believe is most appropriate at the time of purchase. The market capitalisation figures for both the portfolio and the benchmark are at the security level, not aggregated up to the main issuer. The dividend yield quoted here should not be used as an indication of the income to be received from this portfolio.

Performance figures are not based on audited financial statements and, unless indicated otherwise, assume reinvestment of interest and dividends. When comparing the performance of TEMIT with the benchmark index, it is important to note that the securities in which TEMIT invests may be substantially different than those represented by the benchmark index. Furthermore, an investment in TEMIT represents an investment in a managed investment company in which certain charges and expenses, including management fees, are applicable. These charges and expenses are not applicable to indices. Lastly, please note that indices are unmanaged and are not available for direct investment. Certain data and other information shown have been supplied by outside sources. While we consider that information to be reliable, we give no assurance that such data and information is accurate or complete.

All MSCI data is provided "as is." The portfolio described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the portfolio described herein. Copying or redistributing the MSCI data is strictly prohibited.

For more information, UK investors should contact: Franklin Templeton Investments, The Adelphi, 1-11 John Adam Street, London WC2N 6HT. Telephone: [phone], E-Mail: [e-mail]. Issued by Franklin Templeton Investment Management Limited (FTIML). FTIML is authorised and regulated by the Financial Services Authority.

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