for personal use only - asx2016/03/01 · templeton global growth fund ltd 4 • net tangible...

Templeton Global Growth Fund LtdShareholder Briefing

March 2016

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Agenda

Templeton Global Growth Fund Ltd

2

• Key Results

• TGG Director commentary

• Investment Manager presentation

• Q & A

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KEY RESULTS


3

• Profit from Ordinary Activities after tax for the period ended 31 Dec:

2015: $1,054,749

2014: $1,004,291

• Final dividend of 4.1 cents per share paid 25 September 2015:

0.7 cents per share fully franked

3.4 cents per share unfranked

No interim dividend was declared by the DirectorsFor

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4

• Net tangible assets per share (before tax) of $1.39 at 31 Dec 2015

(2014: $1.42) and after payment of 4.1 cents per share dividend in

September 2015.

KEY RESULTS

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Director Commentary


5

5

• Share Price Performance

Investment Performance

Capital Raising

Discount to NTA

Share Buy-Back

Weekly Estimated NTA

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Director Commentary


6

• Shareholder Communications

• Expense Management

• Dividend Policy

• Remuneration Report

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Templeton Global Growth FundShareholder Briefing – March 2016

All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic

instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent a strategy focuses on

particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of

focus than a strategy that invests in a wider variety of countries, regions, industries, sectors or investments.

PETER WILMSHURST, CFA®

EVP/Portfolio Manager/Research Analyst

Templeton Global Equity Group

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Agenda

What ails the market? 4 Cs and a D.

A Time for Value? The Best of Times, The Worst of Times.

TGG’s Portfolio

• European recovery

• Still a focus on Financials, Energy and Health Care

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4 Cs of Concern

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China: Why China is Devaluing

60

70

80

90

100

110

120

130

140

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16

Chinese Real Effective Exchange RateJanuary, 1994 to January 2016

Real Effective Exchange Rates (REERs) are inflation-adjusted, trade-weighted currency indices. 2010=100.

Source: Bank for International Settlements (BIS).

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Chinese Terms of TradeJanuary, 2005 to November, 2015

China: It’s Not A Trade Problem

Source: CLSA, Datastream, CEIC Data, National Bureau of Statistics.

Chinese Trade Balance1 vs.

Change In Forex Reserves2

January, 2005 to January, 2016

1 12 month moving total.2 Annual change.

Source: BCA.

YoY

Foreign Exchange

Reserves (rhs)

Trade Balance

(lhs)

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China: Non-Manufacturing Still Growing

China Caixin PMIJanuary, 2012 to January, 2016

Source: BCA Research, Markit Economics.

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Credit: Rising Spreads in High Yield Bonds; Dealers are Holding Less Inventory

US High Yield Option

Adjusted SpreadsJanuary, 2001 to January, 2016

Shown smoothed except for latest data point.

Source: BCA Research, Barclays.

US Primary Dealers’ Net

Holdings of Corporate DebtJuly, 2001 to December 2015

Data is split into two periods (July 2001 to March 2013, and April

2013 to now) due to changes in data structure. Includes commercial

paper.

Source: CLSA, New York Federal Reserve.

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Nassim “Black Swan” Taleb on the Real Financial Risks of 2016Wall Street Journal – 31st December, 2015

Credit: Father Of The “Black Swan” Feeling Fine About Banks

“First, worry less about the banking system. Financial institutions today are

less fragile than they were a few years ago.”

“… since 2009, banks have been shedding their exposures to extreme

events.”

“… another Lehman Brothers isn’t likely to happen with banks…”For

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Credit: Leveraged Players Are Not The Key Holders of Corporate Bonds

US Corporate and Foreign Bonds HeldMarch, 1970 to September 2015

Source: BCA Research.

, LHS)

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Credit: Financial Conditions Tightening On Rising Spreads And USD

Goldman Sachs Financial Conditions Index1996 to 2016

Source: Bloomberg, Goldman Sachs.

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Credit: Emerging Market Private Debt Up; Advanced Economies Down

Private Credit in Emerging and Advanced Economies, % nominal GDP2006 to 2015

Weighted average by nominal GDP.

Source: BIS, IMF.

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1 Source: BIS. 2 Source: BIS, national data.

122

107

90

100

110

120

130

140

150

'64 '69 '74 '79 '84 '89 '94 '99 '04 '09 '14

USD REER 20 Year Moving Average

USD Debt to EM Non-Banks2

2000 to 2015

US Real Effective Exchange Rate1

January, 1994 to January, 2016

Currency: Combination of Greater USD Debt and a Strengthening Dollar

%

Am

ou

nts O

utstan

din

g (U

S$, t)

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Commodities: Trillions Transferred From Producers to Consumers

CommodityEst. 2016

ProductionAvg price 2011-

2013 (USD)Spot Price

(24th Feb 16)2016 Revenue @ '11 -'13 avg price (US$, b)

2016 Revenue @ spot (US$, b)

Difference (US$, b)

WTI Oil 35.4b bbls 96/bbl 32/bbl 3,389 1,140 -2,249

Thermal Coal 6.1b t 101/t 53/t 615 326 -289

Iron Ore 1.4b t 144/t 46/t 202 64 -138

Coking Coal 1.1b t 198/t 73/t 210 80 -130

Copper 22.8m t 8,033/t 4,664/t 183 106 -77

Aluminum 59.6m t 2,119/t 1,576/t 126 94 -32

Nickel 1.9m t 18,487/t 8,675/t 36 16 -20

Total -2,935

Estimated Fall in 2016 Commodity Revenues Due to PriceSpot Prices as at 24th February, 2016

Source: GMFS, CLSA, World Coal Association.

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Commodities: Trade Deceivingly Worrying

Change in Trade Balance, % of GDP2014

Source: IMF Spillover Report, BCA Research.

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Commodities: Empty Port, Full Airport

Hong Kong Container Traffic vs. Hong Kong Passenger TrafficJanuary, 2010 to September, 2015

Source: CHA-AM Advisors, HKIA, HK Port and Maritime Statistics

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Oil Price vs. US 10 Year

Inflation SwapJanuary, 2014 to January, 2016

Deflation: Inflation Has Tracked Oil;And NIRP, the New ZIRP

Source: Thomson Reuters, Credit Suisse.

Google Trends: Negative

RatesJanuary, 2004 to February, 2016

Partial data for February 2016.

Source: Google Trends.

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Deflation: Global Growth Surprisingly Stable; Core Inflation On The Rise

1Source: IMF.2Source: US Bureau of Labor Statistics, Eurostat, Statistics Bureau (Japan)

Global GDP Growth (% PPP)1

1983 to 2020E

G3 Core Inflation (% YoY)2

January, 2008 to November 2015

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Deflation: US Wage Growth

Nominal Income Annual GrowthMarch, 2007 to October, 2015

Source: Global Macro Shifts, US Bureau of Economic Analysis, US Bureau of Labor Statistics.

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1 Source: Factset. Data as of 31/08/15. Rolling 10yr annualised excess returns of MSCI World Value Index vs. MSCI World Growth Index. 2 Source: Fama & French, Kempen Capital Management. US stocks only.

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

'84 '87 '90 '93 '95 '98 '01 '04 '06 '09 '12 '150

10

20

30

40

50

60

70

80

90

100

110

1999 1933 1977 1989 1937 1927 1955 Current

MAGNITUDE

DURATION

An Unprecedented Dry Spell for Value

25

Length of Previous Periods: Value

Underperforming Growth2

Relative Performance Global Value

vs. Global Growth1

To August, 2015

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0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

1997 2000 2002 2004 2006 2008 2010 2013 2015

Price/TBV of Value/Growth Average+1 Standard Deviation +2 Standard Deviation-1 Standard Deviation -2 Standard Deviation

1 Source: Bloomberg. Data as of 12/31/15. 2 Source: Datastream, J.P. Morgan, December 2015

Valuation Gap is Extreme

26

Price to Book Value: Quality Stocks

vs. Value Stocks2

To December, 2015

Price to Tangible Book Value: MSCI

World Value vs. MSCI World Growth1

To December, 2015

Over 3x more

expensive

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1 Source: Barclays.2 Source: Calculations by Franklin Templeton Investments using data sourced from FactSet.

27

Year 1 Year 2 Year 3

Average Cumulative 3-Year Total

Return After Fed Liftoff2

Six Periods From 1974 to 2007

Global Value vs. Growth Has Closely

Tracked US 10 Year Yields1

To 2015

When the Economy Strengthens, Value Stocks Perform Better

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-10%

-5%

0%

5%

10%

15%

1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

Value Outperforms

Growth Outperforms

Ex. 1: 1942

Next 5 Yrs:

Value +329%

Growth +148%

Ex. 2: 2000

Next 5 Yrs:

Value +89%

Growth -27%

Ex. 3: 2015

Next 5 Yrs: ???

Value has outperformed 87% of the time

Source: Eugene Fama & Kenneth French. Templeton Global Research Library. October 2015.

Long Term Value Performs

28

Value vs. Growth: Excess Return, 10 Year CAGRTo October, 2015

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As of 31st January, 2016

35%North

America

23%Eurozone

19%Asia

21%Non-Euro

Europe 2%Other

Weightings as percent of equity. Percentage may not equal 100% due to rounding.

29

29

Templeton Global Growth Fund – Weights

CD, 7%

CS, 3%

Energy, 15%

Financials, 27% Health Care,

19%

Industrials, 14%

IT, 2%

M, 6%

TS, 8%

EUROPE SECTOR SPLIT

0.0

1.3

2.2

1.3

7.1

3.8

4.5

7.1

7.4

2.5

1.2

3.9

0.8

3.2

0.7

4.2

6.6

0.3

1.2

2.3

2.1

3.4

2.3

4.3

5.4

0.6

1.3

3.4

1.3

2.5

1.0

5.4

3.4

0.1

1.6

0.3

0 5 10 15 20 25

Utilities

Materials

Consumer Staples

Telecom. Services

Industrials

Info. Tech.

Energy

Consumer Disc.

Health Care

Financials

PORTFOLIO GEOGRAPHIC-SECTOR WEIGHTINGSAs At 31st January, 2016

North America

Eurozone

Non-Euro Europe

Asia

Other

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Current

(December 31, 2015)

Long Term Average

(Since Apr. 1998)

P/TE 12.1x 17.9x

P/B 1.6x 2.0x

Earning Trend Poised to Rise

Opportunities Many

U.S. Earnings at All Time HighsMSCI USA Index

31st January, 2001 to 31st December, 2015

Eurozone Earnings Poised to RiseMSCI EMU Index


Regional Differences in Earnings Cycles and Valuations

Source: FactSet, MSCI. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This

report is not prepared or endorsed by MSCI. See www.franklintempletondatasources.com for additional data provider information.

Current

(December 31, 2015)

Long Term Average

(Since Jan. 1980)

P/TE 19.3x 18.1x

P/B 2.8x 2.6x

Earning Trend Rising

Opportunities Some

30

Earnings per share, last 12-month (rhs)

Price

Pri

ce

Earn

ing

s per sh

are

Pri

ce

Earn

ing

s per sh

are

Earnings per share, last 12-month (rhs)

Price

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31

European Earnings Appear to Have Sizable Catch-up Potential

1st January,1999 to 04th January, 201631st January,1973 to 04th January, 2016

Source: BCA Research. Note: expressed in common currency terms.

European Companies Are Still Under-Earning

250

200

150

100

50

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

250

200

150

100

50

25

EARNINGS PER SHARE:

EURO AREA

U.S.

© BCA Research 2016

200

180

160

140

120

100

US EPS at all

time high

Euro area EPS

80

60

2000 2002 2004 2006 2008 2010 2012 2014 2016

200

180

160

140

120

100

80

60

© BCA Research 2016

EARNINGS PER SHARE:

EURO AREA

U.S.

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1 Source: Barclays Research, MSCI.2 Source: Thomson Reuters, Credit Suisse Research. Latest data as of December 02, 2015.

The European Economy is Gaining Traction

Europe

Japan

US

32

European Bank Loans1

1999 to 2015

European Domestic Demand2

2008 to 2015

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Europe Has Outperformed During US Interest-Rate Liftoffs

Average Regional Total Return Following Fed LiftoffFive Periods through to 2007

Source: Thomson Datastream, UBS Equity Strategy.

Europe

US

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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1893 1913 1933 1953 1973 1993 2013

34

European Banks Price-to-Book Value2


U.S. Banks are Near Long-Term Average Valuations While Euro Banks are Still Discounted

1 Source: Anthony Saunders & Berry Wilson, Impact of consolidation and safety net support on Canadian, US and UK banks, 1892-1992 (1999). Michael Keeley, Deposit Insurance, Risk

and Market Power in Banking (1990). FDIC – History of the 1980s. Datastream, SNL. Autonomous Research. * ignores war years, and one-off years at below 1xBV. 2 Source: FactSet, MSCI. Data from January 31, 1995 to December 31, 2015. See www.franklintempletondatasources.com for additional data provider information.

Long-Term

Average = 1.6

(Pri

ce-t

o-B

oo

k V

alu

e)

95% Upside

Potential

if P/B Mean

Reverts

71% Upside

Potential

if P/B

Matches

US LT Avg1.0x

1.4x

U.S. Banks Price-to-Book Value1

As of 04th January, 2016

Long-Term

Average = 1.4

(Pri

ce-t

o-B

oo

k V

alu

e)

1.0x

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35

This Is Not 2007 All Over Again

US Exposure to Energy & EM Debt1

Q3 2015

2007 vs. Now: Aggregate of Citi, BofA

& JP Morgan2

1 Source: SIFMA, IMF, Treasury Bulletin, FDIC, BEA, BIS, Empirical Research Partners. 2 Source: Company reports, Autonomous. 3 Subprime loans/TCE. 4 Energy loans/TCE.

Key Items Metrics 2007 2015

Capital Buffer𝑇𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝐶𝑜𝑚𝑚𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦

𝑇𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝐴𝑠𝑠𝑒𝑡𝑠3.4% 8.5%

Sub-Prime (’07)

Energy (’15)

𝐿𝑜𝑎𝑛𝑠

𝑇𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝐶𝑜𝑚𝑚𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦167%3 11%4

Refinancing Risk𝑆𝑇 𝐵𝑜𝑟𝑟𝑜𝑤𝑖𝑛𝑔𝑠

𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠10% 2%

Liquidity Check𝐶𝑎𝑠ℎ & 𝑇𝑟𝑒𝑎𝑠𝑢𝑟𝑖𝑒𝑠

𝑆𝑇 𝐵𝑜𝑟𝑟𝑜𝑤𝑖𝑛𝑔𝑠0.5x 7.1x

Valuation𝑃𝑟𝑖𝑐𝑒

𝑇𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒2.6x 0.9x

2007: Fall in House Prices 2015: Fall in Energy Prices

• Mortgage re-draw no longer a source of consumer

firepower

• Fall in value of consumers’ biggest asset

• Direct impact on economic activity through housing

construction and consumer durables

• Huge consumer disposable income boost

• Significant increase in global fiscal stimulus as

biggest savers move into fiscal deficit

• Cuts to oil capex/employment to hit selective parts

of US, but almost none of Europe (Norway, N. Sea)

vs.

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1%

2%

3%

4%

5%

6%

7%

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Tangible Equity and Returns Are

Higher2003 to 2017 Estimates

Capital Much Higher, Dividends To Flow?

1 Source: Autonomous, STOXX, FactSet, Bloomberg. Data as at 23rd February, 2016. 36

European Dividend Yields & Payout

Ratios1

Next 12 Months Consensus

107%

Div

iden

d Y

ield

s (%

)

52%

53%73%

88%

79% 55% 67%

66% 53%

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Energy: Full of Opportunity

Average

Source: FactSet, MSCI.

MSCI All Country World Energy Index Relative Price-to-Book29th September, 1995 to 31st December, 2015

Pri

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o-B

oo

k

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0

20

40

60

80

100

120

140

160

180

1990 1991 1993 1995 1996 1998 2000 2001 2003 2005 2006 2008 2010 2011 2013 2015

US

$/b

bl

Brent Price Marginal Cost of Supply

Estimated Price of Demand Destruction Estimated Marginal Cash Cost

38

At Current Prices, Investment Will Continue to

Decline and Marginal Production to Close

Source: Bernstein, as of 11/27/15.

Operating at

Cash Costs is

Not Sustainable

• Marginal full cost for oil (~$75) is a reasonable

medium-term price expectation as new

investment will be needed to meet demand

• Today’s price is bumping along marginal cash

cost

Brent Price vs. Marginal Cost vs. Demand DestructionThrough to November, 2015

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Oil Intensity Has Been Falling For 40 Years

Oil Intensity vs. Demand1965 to 2015

Source: Thomson Reuters, Credit Suisse.

50

55

60

65

70

75

80

85

90

95

100

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

1,000 bb

l/d

World Oil Demand

Ton

ne

of

Eo

il E

qu

ival

ent

per

US

$m o

f G

DP

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Pharmaceuticals On Their Way Back to Growth?

Source: 1FactSet Market Aggregates, 2Berenberg, 3Consumer Expenditure Survey, U.S. Bureau of Labor Statistics. BLS data from mid 2013 to mid 2014.

June 2009

MSCI ACW Pharmaceuticals: Forward P/E1

January, 1997 to February, 2016

US FDA Approvals2

1974 to 2015

US Mean Annual Health Care Expenditure Per

Person by Age Group3

Back To The Future: Pharma Style

40

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

< 25 25-34 35-44 45-54 55-64 65-74 > 75

Generic

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http://www.praluent.com/

http://www.praluent.com/

Source: © 2015 Morgan Stanley Capital Index (MSCI). All MSCI data is provided “as is.” The Fund described herein is not sponsored or endorsed by MSCI. In no event shall MSCI,

its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the Fund described herein. Copying or redistributing the MSCI data is strictly

prohibited. Indexes are unmanaged and one cannot invest directly in an index.

Weightings as percent of equity. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio

holdings are subject to change.

41

Templeton Global Growth FundSector Allocation

41

Templeton Global Growth Fund vs. MSCI All Country World IndexAs at 31st January, 2016

0% 5% 10% 15% 20% 25%

Utilities

Materials

Consumer Staples

Telecommunication Services

Industrials

Information Technology

Energy

Consumer Discretionary

Health Care

Financials

Templeton Global Growth Fund MSCI All Country WorldFor

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Source: © 2015 Morgan Stanley Capital Index (MSCI). All MSCI data is provided “as is.” The Fund described herein is not sponsored or endorsed by MSCI.

In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the Fund described herein. Copying or redistributing

the MSCI data is strictly prohibited. Indexes are unmanaged and one cannot invest directly in an index.

Weightings as percent of equity. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio

holdings are subject to change.

42

Templeton Global Growth FundGeographic Allocation

42


0% 10% 20% 30% 40% 50% 60%

Australia/NZ

L. America/Caribbean

Mid-East/Africa

Asia

North America

Europe

Templeton Global Growth Fund MSCI All Country WorldFor

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For the Fund, the Price to Earnings, Price to Cash Flow, and Price to Book Value calculations for the weighted average use harmonic means. Values less than 0.01 (i.e., negative values) are excluded and values in excess of 200x are capped at 200x. Yields above 100% are also excluded. For the benchmark, no limits are applied to these ratios in keeping with MSCI’s calculation methodology. Due to data limitations, all equity holdings are assumed to be the primary equity issue (usually the ordinary or common shares) of each security’s issuing company. This methodology may cause small differences between the Fund’s reported characteristics and the Fund’s actual characteristics. In practice, Franklin Templeton’s portfolio managers invest in the class or type of security which they feel is most appropriate at the time of purchase. Please note: The dividend yield quoted here should not be used as an indication of the income to be received from this fund.Index statistics calculated by FactSet Research Systems, Inc.Source: Franklin Templeton Investments.

Portfolio Benchmark

Price to Earnings 13.3x 17.3x

Price to Cash Flow 5.1x 10.0x

Price to Book Value 1.2x 1.9x

Dividend Yield 3.0% 2.7%

43


Templeton Global Growth FundPortfolio Characteristics

43

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The benchmark is the MSCI All Country World ex Australia Index Net Dividends Reinvested (AUD) Index.

The portfolio characteristics listed are based on the Fund’s underlying holdings, and do not necessarily reflect the Fund’s characteristics. Due to data limitations all equity holdings are assumed to be the primary equity issue (usually the ordinary or common

shares) of each security’s issuing company. This methodology may cause small differences between the portfolio’s reported characteristics and the portfolio’s actual characteristics. In practice, Franklin Templeton’s portfolio managers invest in the class or

type of security which they believe is most appropriate at the time of purchase. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

Source: FactSet. For the portfolio, the Price to Book Value calculations use harmonic means for the weighted average. Values less than 0.01 (i.e., negative values) are excluded and values in excess of 200x are capped at 200x. For the benchmark, no

limits are applied to these ratios in keeping with the benchmark’s calculation methodology.

44

Templeton Global Growth FundPortfolio Characteristics

44

Templeton Global Growth Fund vs. MSCI All Country World Index

Price to Book Ratio30th June, 2009 to 31st January, 2016

1.4

1.2

1.7

1.9

1.0

1.5

2.0

2.5

Jun'09 Jun'10 Jun'11 Jun'12 Jun'13 Jun'14 Jun'15

Templeton Global Growth Fund MSCI AC WorldFor

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The Ten Largest Holdings represent the ten largest holdings of the fund as of the date indicated. These securities do not represent all of the securities purchased, sold or

recommended for advisory clients, and the reader should not assume that investment in the securities listed was or will be profitable. All portfolio holdings are subject to change.

Holdings of the same issuer have been combined.The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10 holdings list.

Name of Issuer Country Industry % of Total

MICROSOFT CORP United States Software & Services 2.9

SAMSUNG ELECTRONICS CO South Korea Technology Hardware & Equipment 2.1

HYUNDAI MOBIS CO LTD South Korea Automobiles & Components 1.9

COMCAST CORP United States Media 1.8

NISSAN MOTOR CO Japan Automobiles & Components 1.7

AMGEN INC United States Pharmaceuticals, Biotechnology & Life Sciences 1.7

JPMORGAN CHASE & CO United States Banks 1.7

TEVA PHARMACEUTICAL

INDUSTRIESIsrael Pharmaceuticals, Biotechnology & Life Sciences 1.6

CRH Ireland Materials 1.6

ALLERGAN PLC United States Pharmaceuticals, Biotechnology & Life Sciences 1.5

TOTAL 18.5

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As at 31st January, 2016

Templeton Global Growth FundTop Ten Holdings

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Periods of more than one year are annualised. Benchmark is presented net dividends.

Past performance does not guarantee future results and results may differ over future time periods.

Per

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Ret

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-0.2 -3.9

5.5

19.4

13.7

1.40.5

9.8

21.3

13.6

-5

5

15

25

3 Months 6 Months 1 Year 3 Years 5 YearsTempleton Global Growth Fund - Net of Fees & Expenses MSCI AC World Index (Net Dividends) AUD

Templeton Global Growth Fund vs. MSCI All Country World Index As at 31st December, 2015

Templeton Global Growth FundPerformance

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Templeton Global Growth FundPerformance vs. Peers

Templeton Global Growth Fund vs. Morningstar Global Equity Large Value

31st Dec, 15 6 Months 1 Year 3 Year 5 Year 10 Year

Perf (%, pa) (3.9%) 5.5% 19.4% 13.7% 4.0%

Rank 47/53 45/53 29/46 13/45 8/29

Percentile 12% 15% 38% 73% 75%

Returns are post fees & expenses.47

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Summary

• China’s economy remains resilient despite its moderation in growth

• Credit - it’s not 2007 all over again

• Global growth stable and core inflation on the rise

• Looking at opportunities:

• we remain positive on Europe

• abundant value among energy producers and their services partners

• favour lowly valued biotech firms with innovative pipelines

• European financials (and those in the Rest of the World) continue to

look attractive

• Eventual normalisation of economic and policy trends to be supportive of

value-oriented equities after this pronounced period of underperformance

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Important Legal Information

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All investments involve risks including loss of principal. Special risks are associated with foreign investing, including currency

fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the

same factors, in addition to those associated with their smaller size and lesser liquidity. While stocks have historically outperformed other

asset classes over the long term, they tend to fluctuate more dramatically over the short term. The use of derivatives and foreign

currency techniques involve special risks, as such techniques may not achieve the anticipated benefits and/or may result in losses.

Templeton Global Growth Fund Ltd. (ABN 44 006 558 149) issues this document with the intention to provide general information only

and not investment or financial product advice. It does not take into account the individual objectives, financial situation or needs of any

recipient. Nothing in this update should be construed as investment advice. Franklin Templeton Investments have exercised professional

care and diligence in the collection of information in this recording. However, data from third party sources may have been used in its

preparation and Franklin Templeton Investments has not independently verified, validated or audited such data.

Past performance does not guarantee future results and results may differ over future time periods.

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for personal use only - asx2016/03/01 · templeton global growth fund ltd 4 • net tangible...

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