BY KNOWING WHERE
TO LOOK, YOU CAN
SPOT EMERGING OPPORTUNITIES

TIME TO RETHINK EMERGING MARKETS

The recent trade tensions caused investors to back away from emerging markets (EMs), but there are many reasons to be optimistic about the asset class. We believe that an undeniable change in EMs is taking place, driven by the pursuit of a better life. Several EMs have also seized the lead in innovation and are leapfrogging established business models through innovation and technology.

Take our quiz to test your emerging markets knowledge. Some of the answers may come as a surprise to you. As you rethink EMs, we are here to help you take advantage of the opportunities available.

Are you an emerging markets guru?

Find out with our four quick-fire questions.

1 / 4

Over the past three years^, global stock markets have done quite well. The MSCI All Country World Index went up 11% annually*. How much did the stock market go up in China?
^ in USD and as at 31 MARCH 2019

Select the correct lantern

  • 16%
  • 14%
  • 12%
  • 10%
2 / 4

Rank the following countries in order of BMW car sales in 2018.

Drag and drop the country names to their position

USA
1st
Germany
2nd
China
3rd
Argentina
4th
UK
5th
3 / 4

What % of emerging markets exports go to other emerging market countries?

Select the correct ship

  • LESS THAN 30%
  • 30% - 40%
  • 40% - 50%
  • 50% +
4 / 4

Which of these countries consumes more Guinness than Ireland?

Select the correct country from the list below

  • Germany
  • Denmark
  • Nigeria
  • China
1 / 4

Which one of these countries has the biggest representation^ on the list of the world’s largest 100 companies (after the US)?
^ Weighted by market capitalisation

Select the correct country

  • Germany
  • Switzerland
  • China
  • United Kingdom
  • Japan
2 / 4

Three of these stock markets went up by around 50% over the past three years^. Which one did not?
^ in Euro and as at 31 January 2019

Drag the correct country below the line

Poland
China
Thailand
Germany
Drag below
3 / 4

Which of the following retail events generates the most online revenue?

Select the correct holiday from the list below

  • Black Friday in the US
  • Cyber Monday in the US
  • US Thanksgiving sales
  • Singles Day in China
4 / 4

Out of the following countries, which has the fastest mobile internet connection speed on average?

Select the correct sim card

  • USA
  • Sweden
  • Hong Kong
  • South Korea
7 / 8

Which one of these is not among the largest five companies in the world?

Select the correct logo

Scores

0/8

Oops. At least you know more now than you did five minutes ago. Our ‘Quick Guides to Emerging Markets’ break down all the basics, and demonstrates how your portfolio could benefit from the dynamism of emerging markets.

You were probably surprised by some of the answers. Want to find out more about emerging markets? Our ‘Quick Guides to Emerging Markets’ will give you more insight into how they could benefit your investment strategy.

Not bad. The staggering growth of emerging markets may have come as a surprise which resulted in this score. If you’d like to find out more, then our ‘Quick Guides to Emerging Markets’ will shed some more light on what emerging markets can offer your portfolio.

Pretty Good. You know your way around these markets. But as an investor, are you benefitting from sensible exposure to emerging markets? Scroll down to read more about how you can do so.

Well done! You are an Emerging Markets Guru! Even though you seem to know everything, are you confident you are actually benefitting from these markets as part of a balanced investment portfolio? Our ‘Quick Guides to Emerging Markets’ have some ideas.

Why Consider Emerging Markets?

1. Invest in the World’s Future Giants

Emerging markets are expected to contribute 62.7% of global growth by 2023. It was only 16 years ago when these markets accounted for 50% of global growth in 2007.
  • Emerging Markets
  • Developed Markets

2. Attractive Valuations

Emerging markets are currently trading at a significant discount to developed markets, providing long-term investors with an attractive investment opportunity.

Price-to-Earnings Ratio Comparisons2

3. Economic Reforms Well Underway

Many emerging markets have embarked on structural reform initiatives, which are critical to economic growth and development. Here are some recent ‘growth-friendly’ events in 5 emerging markets.

CHINA

Deleveraging efforts, supply-side and SOE reforms, liberalization of economy to facilitate economic competitiveness.

SOUTH KOREA

Measures to improve corporate governance, especially in Chaebols, to ensure more inclusive and sustainable growth. Policies to enhance dynamism in SMEs and boost entrepreneurship.

INDIA

Structural reforms in key areas like GST, bankruptcy law, natural resource auction, directed subsidies have been implemented. Ongoing efforts to fight corruption and formalize the economy.

INDONESIA

Focus on infrastructure development, fiscal reform and improving the business climate.

PHILIPPINES

Acceleration of pace of economic reforms, including tax reforms, market liberalization and significant infrastructure spending.

4. China’s ‘New Economy’

Centering on technology and consumption, China is a force to reckon with. With the expansion of its middle class and rising affluence, growing domestic consumer demand is expected to contribute to emerging markets’ resilience in the face of external headwinds.

5. Optimism in The Longer-Term

In light of the recent trade conflict and tariff increase, some repercussions can be expected in the near term.

In the longer term however, similar to how emerging markets equities have displayed resilience through the years and historically bounced back from external shocks, we believe earnings should recover as markets and companies start to factor in the trade issues.

Long-term Outperformance of EM stocks3

Various MSCI Indices
Indexed to 100, Total Return, USD
31 Dec 1987 - 31 Mar 2019

Scroll horizontally to view the chart
  • MSCI Emerging Markets Index
  • MSCI World Index
  • MSCI AC Asia ex-Japan Index

Our Range of Emerging Markets Funds

Key Investment Themes

DOMESTIC CONSUMPTION PLAY


Focusing on companies that are beneficiaries of domestic consumption-driven economies.

STRONG FUNDAMENTALS


Identifying companies with prudent financial policies, strong balance sheets and sound corporate governance that are likely to succeed in the long term.

ATTRACTIVE VALUATION


Seeking mispriced stocks in under-researched sectors.

Templeton Emerging Markets Fund

An equity fund that invests in well-researched, quality companies within global emerging markets across market capitalisations, with a focus in consumerism and technology

Overall Morningstar RatingTM 4

FACTSHEET


Templeton Emerging Markets Smaller Companies Fund

An equity fund that invests in smaller, well-governed companies within global emerging markets with strong cash flow and high return-on-equity

Overall Morningstar RatingTM 4

FACTSHEET


Templeton Emerging Markets Balanced Fund

One-stop solution for global emerging markets equity and fixed income

Overall Morningstar RatingTM 4

FACTSHEET

Useful Resources

Emerging Markets Come of Age

Driven by the pursuit of a better life, emerging markets are not what they used to be. Yet, outdated perceptions about EMs persist. Read about the three new realities in EM investing.

Read More

China's Century?
The Economic Giant's Next Act

After years of heady growth, China is now at a crosswoads, Read more about our outlook on China, as economic growth slows and de-risking becomes a priority.

Read More

China’s Sci-Tech Board: Hope or Hype?

In November 2018, Chinese President Xi Jinping unveiled plans to launch a science and technology innovation board on the Shanghai Stock Exchange. What could the new Nasdaq-Style exchange mean for investors?

Read More

Why Franklin Templeton For Emerging Markets Equity?

DELIVERING EXCELLENCE FOR OVER
70
YEARS

As Franklin Templeton's global centre for emerging markets investment management, you're able to draw on our specialized investment talent, global reach and robust risk management, right here in Singapore.
Comprising of highly experienced investment professionals, the emerging markets team have not only been closely monitoring the development of Emerging Markets but have also been part of its unfolding since the early 2000s.
Our strong local presence in global emerging countries represents a strategic advantage over other managers, along with established relationships with local governments, corporations, industry consultants and brokerage firms that put us in a prime position for advocating investors' best interest.
AMERICAS
4 Locations

BUENOS AIRES

SÃO PAULO

RIO DE JANEIRO

NEW YORK

EUROPE, MIDDLE EAST & AFRICA
8 Locations

VIENNA

FRANKFURT

WARSAW

BUCHAREST

CAPE TOWN

ISTANBUL

DUBAI

EDINBURGH

ASIA-PACIFIC
10 Locations

KUALA LUMPUR

SEOUL

SHANGHAI

SINGAPORE

HYDERABAD

BANGKOK

HO CHIN MINH CITY

HONG KONG

CHENNAI

MUMBAI

Investment Approach

STRONG TEAM WITH IN-DEPTH LOCAL KNOWLEDGE


20+
Offices globally


80+
Analysts conducting bottom-up research

HIGH-CONVICTION INVESTMENT APPROACH


Seeks companies at deep discounts to intrinsic value


Comprehensive strategies backed by thorough research

INTEGRATED RESEARCH


In-depth country and sector analysis and reporting

VALUE ORIENTATION WITH LONG-TERM HORIZON


Attractive portfolio valuation


Minimise portfolio turnover and trading cost

Templeton Emerging Markets Fund, Templeton Emerging Markets Smaller Companies Fund and Templeton Emerging Markets Balanced Fund are sub-funds of Franklin Templeton Investment Funds ("FTIF"), a Luxembourg registered SICAV.

What Are The Key Risks?

Templeton Emerging Markets Fund
The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. The Fund invests mainly in the equity securities of emerging markets around the world, which have historically been subject to significant price movements, frequently to a greater extent than equity markets globally. As a result, the performance of the Fund can fluctuate considerably over time.

Other significant risks include: emerging markets risk, currency risk, liquidity risk, operational risk, Shanghai-Hong Kong Stock Connect risk. For full details of all of the risks applicable to this Fund, please refer to the "Risk Considerations" section of the Fund in the current prospectus of Franklin Templeton Investment Funds.

Templeton Emerging Markets Smaller Companies Fund
The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. The Fund invests mainly in the equity securities of smaller companies in emerging markets. Such securities have historically been subject to significant price movements, frequently to a greater extent than equity markets globally. As a result, the performance of the Fund can fluctuate considerably over time.

Other significant risks include: currency risk, emerging markets risk, liquidity risk, operational risk, Shanghai-Hong Kong Stock Connect risk. For full details of all of the risks applicable to this Fund, please refer to the "Risk Considerations" section of the Fund in the current prospectus of Franklin Templeton Investment Funds.

Templeton Emerging Markets Balanced Fund
The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. The Fund invests mainly in debt and equity securities issued by entities located in emerging countries. Such securities have historically been subject to price movements, generally due to interest rates, market factors or movements in the equity and bond markets. As a result, the performance of the Fund can fluctuate considerably over time.

Other significant risks include: credit risk, derivative risk, emerging markets risk, liquidity risk, Shanghai-Hong Kong Stock Connect risk. For full details of all of the risks applicable to this Fund, please refer to the "Risk Considerations" section of the Fund in the current prospectus of Franklin Templeton Investment Funds.