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ii Super 60 - Templeton EM Smaller Companies

ii Super 60 investments

ii Super 60 investments:
Templeton Emerging Markets Smaller Companies

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under review This Super 60 fund is currently under formal review. Find out more

Asset Group Asset Sub-Group Investment Category
Equities Emerging Markets Smaller Company

Selection rationale:
Like many other strategies investing in smaller companies in emerging markets, Templeton Emerging Markets Smaller Companies had a tricky 2019, but investors should have confidence in its excellent longer-term track record continuing.

Chetan Sehgal succeeded emerging markets veteran Mark Mobius as named manager on the fund in April 2017. He had in fact been doing the heavy lifting on the fund since its launch in 2007 alongside Vikas Chiranewal, who also still works on the strategy. Warsaw-based Krzysztof Musialik stepped on to the roster in 2018. In managing the fund, the trio draw upon a large team of analysts providing support from locations across the emerging markets world.

As at end of March 2020, the fund invests in 91 companies with market capitalisations that, at the time of purchase, are within the range of those included in the MSCI Emerging Markets Small Cap index. When choosing which companies to buy, they follow Templeton’s value-oriented approach – looking for small companies that appear cheap relative to their five years of projected earnings growth. The process starts with a screen of a master list of small company stocks, which seeks 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 might otherwise be overlooked.

April 2020

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Under formal review Under Formal Review

The Templeton Emerging Markets Smaller Companies Fund is included in the ii Super 60 list of rated funds as Smaller Companies option within the Emerging Markets category.

In line with our stated methodology, the investment selection committee decided to put the fund under formal review on 3 August 2020 due to performance concerns. As part of the formal review process, we will conduct an in-depth analysis of the investment team and methodology, performance attribution and current shape of the portfolio, as well as the outlook for the fund.

(3 August 2020)

Risk warnings

Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab. 

The information we provide in the ii Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor. 

Any changes to the ii Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii Super 60 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii Super 60 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii Super 60 investments list.