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CONTRIBUTORS

Nicholas Chui

Portfolio Manager,
TGI China Equities,
Hong Kong

Janakiraman Rengaraju, CFA

CIO,
TGI India,
Chennai

Bassel Khatoun

Portfolio Manager,
TGI MENA Equities,
Dubai

Frederico Sampaio, CFA

CIO,
TGI Brazil,
Sao Paulo

Preview

We recently engaged with our emerging market portfolio managers to listen to their views on China, India, Middle East and Latin America.

Their investment views centered on the changing consumption patterns in China, continued domestic inflows to the Indian market, international investor under allocation to the Middle East and the emergence of market friendly policies in Latin America.

Significant year-to-date gains in emerging markets imply investors have begun to recognize the investment opportunity.

As this follows a prolonged period of underperformance relative to developed markets, there remains potential for further re-rating before valuations become a concern.

Conclusion

Investor sentiment towards emerging markets is changing. New growth drivers are emerging and our on-the-ground research teams are matching these drivers with companies trading at a discount to their intrinsic worth. Opportunities abound amongst our preferred themes of digitization and the role of change agents in the technology sector including semiconductor companies powering the growth of artificial intelligence. We also see opportunities in consumption, particularly in new business models in consumer services, as well as banks focused on increasing access to financial products in Asia and Latin America. Risks do exist, but we view these as cyclical in nature and are set against the backdrop of reforms driving structural growth in emerging markets.

RISKS

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the 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 necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

WF: 7292111

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This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the 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 necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

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