Franklin Templeton has launched the Templeton Emerging Markets Ex-China fund, managed by Andrew Ness and Chetan Sehgal, the duo behind the £1.8bn Templeton Emerging Markets Investment Trust (TEMIT).
The new open-ended fund will differ from TEMIT by excluding China. Jaspal Sagger, global head of product at Franklin Templeton, said “many clients are looking to customise their allocations to China” and this fund will enable investors to “manage their Chinese equity exposure separately”.
Although Chinese equities have enjoyed a stellar recent run following a package of stimulus measures, Ness said he sees “a large opportunity set in countries outside of China such as Brazil, India, South Korea and Taiwan”. Many companies in these countries are “benefitting from rising domestic consumption”, while others are “powering the global economy”.
“There are strong investment opportunities such as offline and online consumer companies, banking, rising healthcare players and technology to name a few. These opportunities are underpinned by structural growth drivers such as consumer penetration, demographics and digitalisation,” he explained.
The Templeton Emerging Markets Ex-China fund, which is EU SFDR Article 8 compliant, will be a concentrated portfolio of 40-60 stocks.
Franklin Templeton also unveiled two exchange-traded funds (ETFs) with one catering to investors who wish to exclude China and the other covering all emerging markets. The Franklin FTSE Emerging ex-China UCITS ETF and the Franklin FTSE Emerging Markets UCITS ETF have a total expense ratio (TER) of 0.11%.
The ETFs will be managed by Dina Ting, head of global index portfolio management, and Lorenzo Crosato, ETF portfolio manager.