Templeton Emerging Markets Investment proposes new investment policy
(Alliance News) - Templeton Emerging Markets Investment Trust PLC on Tuesday proposed amending its policy to allow higher investments in a single company, enabling it to actively manage its exposure to Taiwan Semiconductor Manufacturing Co Ltd.
The trust said its current investment limit is 12% of the company's total assets, measured when the position is opened. A holding may rise above the limit due to valuation changes, but the managers cannot make further purchases if the holding would remain above the permitted limit.
Templeton said TSMC's share price has performed extremely strongly, rising to just below 16% in the benchmark index as of September 30, from 6.8% in June 2023.
Templeton, which had around 18% in TSMC as of September 30, said the semiconductor firm has been a major contributor to its performance.
The board maintained that the investment managers are "constrained by the current investment policy", as they cannot sell part of the TSMC holding and increase the investment again if it remains above 12% of total assets.
As a result, they propose increasing the maximum permitted exposure to a single company to the higher of 12% of total assets or the investee company's weighting in the benchmark plus 4%. This would be subject to an absolute limit of 25% of the company's total assets, measured at the time of investment.
Templeton said: "In proposing this change, the board is not advocating the concentration of the portfolio in TSMC or any other company which might have a high benchmark weighting. (...) Shareholders should, however, be aware that under the new investment policy the company would be able to hold a larger proportion of its total assets in a single investee company than it currently can."
Templeton convened a general meeting on December 1 for shareholders to vote on the proposal.
Shares in the trust were up 0.2% to 299.50 pence on Tuesday in London.
By Camilla Borri, Alliance News reporter
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