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Emerging Markets Outlook

Title Speaker Date

Templeton Emerging Markets Overview, August 2015

Aug 31, 2015

Featuring:  Mark Mobius, Ph.D., Executive Chairman, Templeton Emerging Markets Group

  • August proved a very difficult month for equity markets globally.
  • Events in China were the major driver of a substantial selloff that affected all regions. Although the Chinese authorities made substantial attempts to stem severe weakness in local equity markets, the measures achieved only limited and somewhat transient success. One move in particular, to loosen the trading band of the renminbi, essentially allowing it to devalue, prompted alarm among global investors on fears that the weaker currency could ignite competitive currency volatility and potentially destabilize the economies of China’s neighbors.
  • Weak economic data from China added to the uncertain market mood, while ongoing uncertainty about the timing of an increase in US interest rates was another factor subduing investors’ spirits.
  • Emerging markets as a group were weaker than developed markets as global investors looked to withdraw funds from assets that they perceived to be riskier.
  • Commodity markets were volatile, though late-month rallies supported the prices of oil and iron ore.
  • Within emerging markets, Latin America was the weakest region, dragged lower by Brazil, where concerns about demand from China were exacerbated by weak economic activity, low confidence levels and worries about a potential loss of investment grade status.
  • Colombia and Peru were also weak, but Chile was somewhat more resilient.
  • Asian markets as a whole came under significant pressure, with Hong Kong-listed shares affected by the high volatility in the mainland China “A” share market. Currency weakness impacted Malaysia and other Southeast Asian nations.
  • Eastern Europe and some Middle Eastern markets were relatively stable during the period, but they still lost ground as a group. Qatar, the Czech Republic and Poland fared better than their peers, but Greece re-opened sharply lower after a five-week hiatus, in spite of agreement on a new support package. Egyptian stocks also saw a double-digit decline.

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Important Legal Information

A note to our readers: Given the rapid changes that can take place in global markets, it is often difficult to provide up-to-date materials that address the most current situations. The following update is valid only as of August 31, 2015.

The significant growth potential offered by emerging markets remains accompanied by heightened risks when compared to developed markets, including risks related to market and currency volatility, adverse social and political developments, and the relatively small size and lesser liquidity of these markets.

The information provided is not a complete analysis of every material fact respecting any country, industry, security or investment. Opinions expressed are those of Dr. Mobius and are subject to change without notice. Statements of fact have been obtained from sources considered reliable. Because market and economic conditions are subject to rapid change, his analyses are valid only as of August 31, 2015. His opinions are intended to provide insight as to how he analyzes securities and are not intended as individual investment advice. Performance information is historical and should not be considered predictive of future results. All securities investments fluctuate and involve risks.

Investors should carefully consider a fund’s investment goals, risks, charges, and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN®/342-5236, or visit Please carefully read the prospectus before you invest or send money.

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