templeton growth (euro) fund* - fonds professionell · 2015-07-27 · building the templeton...
TRANSCRIPT
Dealer Use Only / Not for Distribution to the Public
Templeton Growth (Euro) Fund*
Cindy Sweeting, CFAPresident, Templeton Global AdvisorsDirector of Portfolio Management, Templeton Global Equity Group
Fondskongress Mannheim, 29 January 2008
*A subfund of the Franklin Templeton Investment Funds (Luxemburg)
2
Dealer Use Only / Not for Distribution to the Public
Overview
The Templeton Investment Philosophy & ProcessOverview of Markets in 2007Themes for Global Markets in 2008Global ValuationFund Performance
Dealer Use Only / Not for Distribution to the Public
The Templeton InvestmentPhilosophy & Process
4
* Sir John Templeton is no longer affiliated with the Templeton organization. Dealer Use Only / Not for Distribution to the Public
Too many investors focus on outlook and trend; therefore more profit is made by focusing on VALUE. ― Sir John Templeton
If you buy the same securities as other people,you will have the same results as other people. ― Sir John Templeton
The Templeton Investment Philosophy
5
Dealer Use Only / Not for Distribution to the Public
The Templeton Investment Philosophy
Source: Factset as of December 2007, in US-Dollar. The index is provided only to show the investment environment during the specific periods shown. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton fund. An index typically includes a greater number of securities than are held in any fund. An index is unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Templeton funds follow the investment management principles established by their founder and former chairman, Sir John Templeton, who is no longer affiliated with the Templeton organization.
-8
-6
-4
-2
0
2
4
6
8
10
12
14
-100
0
100
200
300
400
500
600
MSCI The World Index Value - Gross Return Ann
MSCI The World Index Growth - Gross Return Cum MSCI The World Index Value - Gross Return Cum
MSCI The World Index Growth – Gross Return Cum
1 Yea
r
2 Yea
r
3 Yea
r
4 Yea
r
5 Yea
r
6 Yea
r
7 Yea
r
8 Yea
r
9 Yea
r
10 Yea
r
11 Yea
r
12 Yea
r
13 Yea
r
14 Yea
r
15 Yea
r
16 Yea
r
17 Yea
r
18 Yea
r19
Year
20 Yea
r
6
Dealer Use Only / Not for Distribution to the Public
Time-Tested Templeton Philosophyand Approach
VALUEAbsolute value investorsBuy companies at discount prices
BOTTOM UPStock-by-stock original analysisFocus on businesses within their globalcompetitive environment
PATIENCERolling 5-year investment horizonPerspective and discipline leads to value recognitionHistorical turnover consistently low
Search the world Search the world for the greatest for the greatest
bargainsbargains
Sir John’s Three Tenets:
Templeton funds follow the investment management principles established by their founder and former chairman, Sir John Templeton, who is no longer affiliated with the Templeton organization.
7
As of 1 January 2008. Dealer Use Only / Not for Distribution to the Public
CHIEF INVESTMENT OFFICERGary Motyl, CFA
DIRECTOR OF RESEARCHNorman Boersma, CFA
DIRECTOR OF PORTFOLIO MANAGEMENTCindy Sweeting, CFA
NASSAU
4 PM/Analysts1 Analyst
TORONTO
6 PM/Analysts3 Analysts
FORTLAUDERDALE
7 PM/Analysts2 Analysts
EDINBURGH
3 PM/Analysts2 Analysts
SINGAPORE
1 PM/Analyst
MELBOURNE
1 PM/Analyst1 Analyst
HONG KONG
3 PM/Analysts1 Analyst
FRANKFURT
1 PM/Analyst
• Average 15 years of industry experience• Average 9 years of tenure with firm• 10 nationalities• 9 languages
Templeton Global Equity GroupManagement Team
8
As of 1 January 2008. Dealer Use Only / Not for Distribution to the Public
Integrated Global Research Platform
GLOBAL SECTOR TEAMS
INDUSTRIALSAlan Chua, CFANeil Devlin, CFA
Tian Qiu, CFA, CPATina Sadler, CFATucker Scott, CFA
Heather Waddell, CFAUwe Zoellner, CFA
INFORMATIONTECHNOLOGY
James Harper, CFAEric Howe, CFA
Matthew Nagle, CFA, CPAPeter Nori, CFA
Katherine Owen, CFACraig Watson
Peter Wilmshurst, CFA
HEALTH CAREMohan KandiahPeter Nori, CFA
Katherine Owen, CFATian Qiu, CFA
FINANCIALSDylan Ball
Neil Devlin, CFAHarlan Hodes, CPAAndrew MacKirdyBrad Radin, CFA
Simon Rudolph, ACAMathias Strohfeldt, CFA
ENERGYMaarten Bloemen
Martin CobbMathias Strohfeldt, CFA
CONSUMERHerbert Arnett
Alan Chua, CFATony Docal, CFA
Harlan Hodes, CPAPeter Moeschter, CFA
Lisa Myers, CFAMatthew Nagle, CFAKatherine Owen, CFA
Craig Watson
Director of Research: Norman Boersma, CFA
ADDITIONAL RESOURCESResearch
TechnologyGroup
Global Research
Library
JuniorResearch Analysts
GlobalRisk
Management
GlobalTradingPlatform
Emerging MarketsGroup
InstitutionalProduct
Management
MATERIALSMaarten Bloemen
Martin Cobb Neil Devlin, CFATony Docal, CFATina Sadler, CFA
Mathias Strohfeldt, CFACraig Watson
UTILITIESMathias Strohfeldt, CFA
Joanne Wong, CFA Guang Yang, CFA
TELECOM SERVICESJames Harper, CFAMatthew Nagle, CFA
Tina Sadler, CFAPeter Wilmshurst, CFA
Joanne Wong, CFA
9
Dealer Use Only / Not for Distribution to the Public
Templeton Investment Process
Templeton Screen/Analysis
Research Evaluation & Critique
Portfolio Developmentand Risk Management
Universe ofCompanies
Director ofGlobal Research
BargainList Portfolio
Sourceof Funds
Best Undervalued Opportunities
V a l u a t i o n / R i s k
10
Dealer Use Only / Not for Distribution to the Public
Portfolio Monitoringand Risk Management
Bottom-UpPortfolio Construction
ResearchTeam Evaluation
In-Depth FundamentalAnalysis
Identifypotential bargains
Ongoing valuation analysisDisciplined sell methodology Weekly peer review and risk analytics
Investment guidelinesIndustry and sector frameworkBuild and diversify portfolioLong-term approach: Aims for low turnover1
Presentation of investment thesisDevil’s advocate counter-caseInvestment debate and critiqueDirector of Research approval
Five-year financial forecastManagement/supplier/competitive evaluationRecommendation of Bargain List candidates
Experienced analystsFocus on global industry sectorsQuantitative and qualitative assessment
Building the Templeton Portfolio
1. Various factors, such as a portfolio’s specific investment guidelines, and market or economic conditions, may cause portfolio turnover to vary.
11
Dealer Use Only / Not for Distribution to the Public
Integrated Global Research PlatformA framework for Templeton’s best thinking
CORE LISTAttractively priced stocks with potential
for significant price upside
BARGAIN LISTStocks priced at a significant discount to their long-term prospects
YEAR 0 1 2 3 4 5
Target Lifecycle of a Templeton Stock
VA
LUA
TIO
N
SOURCE OF FUNDSFully valued stocks recommended for sales
Dealer Use Only / Not for Distribution to the Public
2007 Recap
13
Source: Independent Strategy, 2 November 2007. Dealer Use Only / Not for Distribution to the Public
Derivatives
Securitized Debt
Broad Money
PowerMoney
976% of world GDP
145% of world GDP
80% of world GDP
7% of world GDP
81% of liquidity
12% of liquidity
6% of liquidity
1% of liquidity
Printing Money: Breakdown of Liquidity
14
Source: Goldman Sachs. Dealer Use Only / Not for Distribution to the Public
We are somewherein here
Exacerbated by leverage in the system
The Credit Supply Loop:What happens when credit contracts
15
Dealer Use Only / Not for Distribution to the Public
Lending Standards Tighten Across the Board
16
Source: Bloomberg. Dealer Use Only / Not for Distribution to the Public
BBB Bond Yield:January 2007
Strips Yield:January 2007
BBB Bond Yield:January 2008
Strips Yield:January 2008
2007 Long-Dated Spread
170 BPs
2008 Long-Dated Spread
230 BPs
The Fed Can Lower Short Rates . . .
. . . But The Rates That Matter Have Risen
3M 6M 1Y 3Y 5Y 7Y 9Y 15Y 20Y 25Y 30Y
Flight to Quality: Long Rates Rise andCredit Spreads Widen Despite Fed Action
17
Dealer Use Only / Not for Distribution to the Public
Without Housing Gains –Less Consumer Spending?
Wealth Effects from Real Estate and Financial Asset Appreciation1
as a Share of Personal Income
0.00.20.40.60.81.01.21.41.61.82.0
53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Real Estate Financial Assets
%
Source: Federal Reserve Board.1 Assumes consumption of 9% of real estate equity over three-years and 3% of financial assets over two-years.
18
Source: JP Morgan Chase & Co.. Dealer Use Only / Not for Distribution to the Public
60,9%
94,7%
252,3%
104,8%
45,1%
175,4%
31,2%
-0,2%
-50% 0% 50% 100% 150% 200% 250% 300%
MSCI World Index
MSCI EAFE Index
MSCI EmergingMarkets Index
MSCI EuropeIndex
MSCI Japan Index
MSCI Pacific ex-Japan Index
S&P 500 Index
CitiGroup WldGovt. Bond Index
Capital Market Returns (in EUR)
-0,9%
0,7%
26,1%
3,2%
-13,5%
18,8%
-4,9%
0,1%
-20% -10% 0% 10% 20% 30%
MSCI World Index
MSCI EAFE Index
MSCI EmergingMarkets Index
MSCI EuropeIndex
MSCI Japan Index
MSCI Pacific ex-Japan Index
S&P 500 Index
CitiGroup WorldGovt. Bond Index
1-Year to December 2007 (in EUR) 5-Years ending December 2007 (in EUR)
Global Market Review
19
Dealer Use Only / Not for Distribution to the Public
Themes for Global Markets
Despite the unfolding credit crisis in the leveraged structured debt and derivative markets, corporate earnings outside of the financial sector, free cash flow and financial liquidity remained strong through 2007.However, corporate profits and profitability are at elevated levels- avoid the trap of extrapolationThere is little excess reward for taking on risk- are investors still too complacent?Global valuations are selectively attractive“Traditional” value stocks- cyclicals, commodities, financials, industrials-are not cheap…Bargains are coming up in unusual places- “non traditional value”• Large Cap, Media, Healthcare, Telecoms, and Technology
Dealer Use Only / Not for Distribution to the Public
Global Valuations
21
Source: Factset. Dealer Use Only / Not for Distribution to the Public
More expensive
Less expensive
Price-to-Book Value, Last 10 Years
High-low range Mean Current
Pockets of Attractive Valuations
0,0
2,0
4,0
6,0
8,0
10,0
12,0
AC Wor
ldEne
rgy
Materia
lsIndustr
ials
Cons.
Disc.
Media
Cons S
taples
Health
Care
Financia
lsInfo
Tech
Teleco
m
Utilitie
s
0,0
2,0
4,0
6,0
8,0
10,0
12,0
22
Source: FactSet. As of December 2007. Dealer Use Only / Not for Distribution to the Public
Dividend Yield: Major TelecomPrice to FY1 EPS: Major Telecom
Price to Cash Flow: Major Telecom
Finding Value in Telecom
'98 '99 '00 '01 '02 '03 '04 '05 '06 '070
0.5
1
1.5
2
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2.2
MSCI AC World - CF Yield (Left)MSCI AC Europe / Telecom Services - CF Yield (Right)
'98 '99 '00 '01 '02 '03 '04 '05 '06 '070
20
40
60
80
100
120
140
160 FDSAGG Europe / Major Telecommunications -IND - Price to EPS - FY1
'98 '99 '00 '01 '02 '03 '04 '05 '06 '070
1
2
3
4
5
6 FDSAGG Europe / Major Telecommunications -IND - Dividend Yield
'98 '99 '00 '01 '02 '03 '04 '05 '06 '070
5
10
15
20
25
30 FDSAGG Europe / Major Telecommunications -IND - Price to Cash Flow
23
Dealer Use Only / Not for Distribution to the Public
Vodafone focuses on repairing balance sheetCapital expenditures slashed and company becomes
more disciplined in spending strong cash flows
REASONS FOR INVESTINGMarket reacts to new CEO’s plans for use of cash flow
Solid long-term fundamentals, compelling valuations and strong free cash flow generationAdded to Templeton Bargain List
Bursting of TMT BubbleVodafone stock price falls 80% from March 2000 highs
Poor fundamentals remain
Company profit warning and cautious outlook creates share price weakness
Market not giving credit for value of global brand and level of cash generation
ADDITIONAL BUYING OPPORTUNITY
TMT Bubble Vodafone valuations
reach peak levels
Vodafone is the world’s largest mobile telecommunications company with interests in mobile networks spanning five continents. (As of January 2008.)
Source: FactSet. Information relating to the company identified is provided solely to illustrate the economic lifecycle of a company in a particular sector. It is not a recommendation to purchase, sell or hold any particular security. The stock identified is not necessarily indicative of a portfolio’s holding at any one time.
VodafoneOpportunities in Non-Traditional Value Sectors
'01 '02 '03 '04 '05 '06 '07 0.8
1
1.2
1.4
1.6
1.8
2
2.2
2.4
Vodafone Group PLC (VOD-GB) VOD-GB B16GWD5 London Common stock 30-Mar-2001 to 18-Jan-2008 (Weekly)
High: 2.21 Low: 0.88 Latest: 1.78
Price (GBP)
24
Dealer Use Only / Not for Distribution to the PublicSource: Factset. Data Source: MSCI As of September 2007. An index is unmanaged and one cannot invest directly in an index
Pharmaceuticals: Growth Turned Value
MSCI AC World / Pharmaceuticals -IND (106789)
'98 '99 '00 '01 '02 '03 '04 '05 '06 '0715
20
25
30
35
40106789
Price to Earnings
25
Dealer Use Only / Not for Distribution to the Public
Source: Factset, December 2007. Information relating to the company identified is provided solely to illustrate the economic lifecycle of a company in a particular sector. It is not a recommendation to purchase, sell or hold any particular security. The stock identified is not necessarily indicative of a portfolio’s holding at any one time.
Pharmaceuticals:Merck & Co. and GlaxoSmithKline Plc.
01 02 03 04 05 06 0710
11
12
13
14
15161718
GlaxoSmithKline PLC31-Dec-2001 to 31-Dec-2007 (Weekly) British Pounds
Price
01 02 03 04 05 06 0720
25
30
35404550556065
Merck & Co. Inc.31-Dec-2001 to 31-Dec-2007 (Weekly) U.S. Dollars
Price
26
Dealer Use Only / Not for Distribution to the Public
Source: Factset.Information relating to the company identified is provided solely to illustrate the economic lifecycle of a company in a particular sector.It is not a recommendation to purchase, sell or hold any particular security. The stock identified is not necessarily indicative of a portfolio’s holding at any one time.
Pfizer:Attractive at 1998 prices, and historically low P/E
5101520253035404550
Pfizer Inc. (PFE)PFE 717081103 2684703 NYSE Common stock
Price (USD)
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '070
10
20
30
40
50
60
70
Price to Earnings - FY1
27
Dealer Use Only / Not for Distribution to the Public
0
50
100
150
200
250
300
350
400
450
72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08F
Low Nov. 1993(Index = 67)Low Dec. 1982
(Index = 56)Low Nov. 1977(Index = 54)Low Nov. 1972
(Index value = 41)
Low Dec. 1986(Index = 60)
Peak April 1974(Index = 83)
Peak Feb. 1980(Index = 110)
Peak Aug. 1983Up 50%; Down 29%
(Index 84)
Peak Jan. 1995(Index = 127)
Low Dec. 1998(Index = 66)
Peak March 2000(Index = 105)
Trough October 2001(Index = 68)
ABN-AMRO Base Metal Price Index Consumption Value Weightings
January 2000 =100Al 43%, Cu 30%, Ni 11%, Zn 11%, Pb 3%, Sn 2%
"First Oil Shock" Boom duration 17 mths. Trough to peak 102%. Peak to trough 40%
"Second Oil Shock" Boom duration 27 mths.
Up 103%; Down 49%
Stock Market Crash of Oct.1987 Twin Peaks June 88 & Jan. 89
Duration 18mths Up 195%; Down 62%(Index value = 178) Dissolution of Soviet Union
Huge Inventory Build, Duration 14 mths.Up 89%; Down 48%
Asian Crisis Boom duration 15 mths.
Up 59%; Down 35%
The ABN AMRO Base Metal Price Index has tumbled 35% since its record high seen in May 2007. It is always an exogenous event which brings price cycles to an end. Sub-prime looks to be the culprit this time around.Rising economic headwinds at a time of aggressively rising supply will lead to the first global supply surpluses for some years. Directional call for the metals remains downwards but to still handsome price levels.
Sub-Prime MaelstromBoom duration 67 mths.
Peak Index May 2007 Up 503%
Source: 36 Year ABN-AMRO Base Metal Price Index (Nominal – Money of the Day), LME, ABN AMRO.The index is provided only to show the investment environment during the specific periods shown. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton fund. An index typically includes a greater number of securities than are held in any fund. An index is unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Base Metal = Fool‘s Gold?Peak Levels in Commodities are Unsustainable
36 Year ABN-AMRO Base Metal Price Index (Nominal - Money of the Day)After 6 glorious years index peaked in May 2007, now at an 18 month low
28
Dealer Use Only / Not for Distribution to the Public
BHP Billiton is one of the world’s largest diversified mining companies with leading positions in aluminum, iron ore and copper and an exposure to oil. (As of 30 September 2007.)
Source: FactSet. The sample stock provided is for illustration of our investment cycle only. It is not a recommendation to purchase, sell or hold any particular security. The stock identified is not necessarily indicative of a portfolio’s holding at any one time.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2
4
6
8
10
12
14
16
18
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2
4
6
8
10
12
14
16
18
Strong commodity demand from China and rising oil prices
drive stock price appreciation.
ADDITIONAL BUYING OPPORTUNITYBHP merges with Billiton
Merger concerns create share price weakness
REASONS FOR INVESTING
Market reacts to loss of CEO andstruggling commodity prices
Added to Templeton Bargain List New CEO and cost-cutting strategycreate long-term restructuring story
Stock price reaches fair valuation
Templeton trims into strength
CATALYST FOR TRIMMING
Continued price appreciation driven
largely by momentum. Current peak levels in
commodities are, in our opinion, unsustainable.
BHP Billiton – Templeton’s Patience and Focus onFundamentals Adds Value Over the Longer-Term
29
Dealer Use Only / Not for Distribution to the Public
Templeton Research Drives the Portfolio –Global
As Large Valuation Gaps Converge, New Opportunities Arise.
USAU.S. equities have lagged as investors ignored strong and stable earnings. As a result, we are increasingly finding new bargain opportunities.
EuropeDespite strong performance, we continue to identify bargain opportunities as European stocks are among the cheapest globally.
JapanAlthough Japan‘s economy appears to have stabilized, our bottom-up research indicates a lack of undervalued ideas based on our long-term revenue and margin assumptions. Utilities
• Strong contributor toperformance over the past
several years. RobustM&A activity drives valuations
higher.• We trim our holdings as
stocks reach full valuation.
Media & Telecommunications
• Companies improvingbalance sheets and
increasing shareholder focus.
• We find attractiveopportunities as market
concerns, in our opinion, areoverblown.
Pharmaceuticals
• Valuations remain attractive. We believe strong cash
generation, stable earningsgrowth and restructuring
opportunities offset top-lineindustry challenges.
BARGAIN LIST
CORE LIST
SOURCE OF FUNDS
Metals & Mining
• Strong contributor to past performance due to a
favorable commodities environment.
• Commodity prices remainstrong. We continue to
believe stocks in the sectorare overvalued.
Energy
• Production disappointmentsand challenges in reserve
replacement negatively affectmarket sentiment. In addition,little value is being ascribed
to probable rather thanproven reserves.
• We prefer large integratedoils and find considerable
value in this sector.
Information Technology
• Strong global growth supports a reacceleration in
corporate technologyspending.
• With attractive valuations, wefind selected opportunities.
Portfolio and market data is as of June 30, 2007 and is subject to change. This material is intended solely to help illustrate Templeton’s research process and is not intended as investment advice or a recommendation to buy or sell any security nor to reflect any individual portfolio managed by Templeton.
Market CapLarge-caps have lagged their small-and mid-cap peers as the latter have been strong beneficiaries of M&A activity and cyclical trends in the global economy. This presents a unique opportunity to buy quality, large-cap companies at prices that do not reflect their longer-term value.
30
Source: Factset. As of December 2007. Dealer Use Only / Not for Distribution to the Public
Global Valuations Selectively Attractive
More expensive
Less expensive
High-low range Mean Current
Price-to-book value, last 10 years
01234567
World France Germany UK AC Asiaex Japan
Japan China Canada USA Brazil01234567
31
Source: Factset. As of December 2007. *Largest 100 stocks based on Market Capitalization Dealer Use Only / Not for Distribution to the Public
0,80
0,90
1,00
1,10
1,20
1,30
1,40
1,50
1,60
1,70
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Relative Forward P/E Ratio Average
Global Large Caps:Cheapest in Many Years
Citigroup BMI World Largest 100 Stocks* Relative to the Citigroup BMI Forward P/E Ratio (1989 to August 2007)
32
Source: Factset. Dealer Use Only / Not for Distribution to the Public
Valuation Spreads Top Quintile Compared to the Market Average 1952 – January 2008
The US increasingly Looks Like a Bargain,But Earnings are at Risk
High Quality at Bargain Prices
AverageAverage
S&P 500 Forward P/E S&P 500 Forward P/E 19981998--20082008
'98 '99 '00 '01 '02 '03 '04 '05 '06 '0715
20
25
30
35
40
45S&P 500 Index (SP50)PE - FY1Average
33
Source: Factset, Bloomberg. As of January 2008. Dealer Use Only / Not for Distribution to the Public
USA & Europe: Buying Quality and Global and Global Exposure at a Discount
Company 5 YR EPS CAGR
Net Debt/ Total Capital
% Revs Outside US
Dividend Yield
Microsoft 8.69% -21% 38.7% 1.33
American International Group
21.17% 63% 48.8% 1.54
General Electric 7.92% 72% 46.2% 3.61
Pfizer 7.07% 8% 46.6% 5.69
Oracle 20.11% -2% 56.5% 0,00
Time Warner 7.79% 35% 19.5% 1.61
Siemens 9.56% 26% 79.5% 1.85
Vodafone 3.47% 24% 100% 4.00
GlaxoSmithKline 7.14% 28% 52.2% 2.97
34
Source: Factset. As of January 2008. Dealer Use Only / Not for Distribution to the Public
Emerging Markets Are At All Time Highs
MSCI Asia-Ex Japan, Emerging Markets and BRIC indices relative to S&P 500 Index
01/07 02/07 03/07 04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 01/0880
90
100
110
120
130
140
150
160
170
S&P 500 Index MSCI AC Asia ex JP MSCI BRIC MSCI EM (Emerging Markets)
35
Source: Factset. As of December 2007. Dealer Use Only / Not for Distribution to the Public
More expensive
Less expensive
Emerging Markets:Expensive on an Absolute Price-to-book Basis
'98 '99 '00 '01 '02 '03 '04 '05 '06 '070.5
1
1.5
2
2.5
3
3.5MSCI EM (Emerging Markets) - Price to Book Value Ratio - Monthly
36
Dealer Use Only / Not for Distribution to the Public
Emerging Markets P/E RisingAbove the World Index
Trailing P/E: MSCI EM Index and MSCI World Index
5x
10x
15x
20x
25x
30x
35x
40x
Dez
93
Dez
94
Dez
95
Dez
96
Dez
97
Dez
98
Dez
99
Dez
00
Dez
01
Dez
02
Dez
03
Dez
04
Dez
05
Dez
06
Dez
07
Trailing MSCI EM Trailing MSCI World
Source: Wind Info, Morgan Stanley Team. Priced as of December 2007. An index is unmanaged and one cannot invest directly in an index.
37
Source: MSCI, Factset, Morgan Stanley Research. Dealer Use Only / Not for Distribution to the Public
Emerging Markets Multiple Expansion –China Has Seen a Substantial Re-rating
EM; 104Korea; 98
China; 197
Taiwan; 85
Brazil; 108
Russia; 89S. Africa; 87
India; 159
Mexico; 8460
100
140
180
220
260
Dec
-05
Feb-
06
Mar
-06
Apr
-06
May
-06
Jun-
06
Jul-0
6
Sep-
06
Oct
-06
Nov
-06
Dec
-06
Jan-
07
Feb-
07
Mar
-07
May
-07
Jun-
07
Jul-0
7
Aug
-07
Sep-
07
Oct
-07
Dec
-07
Jan-
08
EM Korea China Taiwan Brazil
Russia S. Africa India Mexico
38
Dealer Use Only / Not for Distribution to the Public
The Myth of Decoupling
39
Source: Factset. Dealer Use Only / Not for Distribution to the Public
The Reality:Chinese Total Exports to Retail Sales
'03 '04 '05 '06 '070
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000Export ; fob - China (Left)Domestic Retail Sales - Billions $US (Right)
40
Dealer Use Only / Not for Distribution to the Public
Templeton Growth (Euro) FundPortfolio Composition
34,2%
51,1%
11,5%
0,1%
0,0%
3,2%
40,7%
45,8%
11,4%
0,0%
4,0%
0,0%
0% 10% 20% 30% 40% 50% 60%
Europe
North America
Asia
L.America/Caribbean
Mid-East/Africa
Australia/NZTempleton Growth (Euro) Fund
Source: Factset. Data as of December 31, 2007. An index is unmanaged and one cannot invest directly in an index.
MSCI World Index (in EUR)
Geographic Allocation – Templeton Growth (Euro) Fund vs. MSCI World Index (in EUR)
41
Dealer Use Only / Not for Distribution to the Public
Templeton Growth (Euro) FundPortfolio Composition
Source: Factset. Data as of December 31, 2007. An index is unmanaged and one cannot invest directly in an index.
22,5%
9,6%
4,9%
8,7%
11,5%
11,2%
10,8%
7,3%
8,8%
4,7%
21,1%
1,3%
0,0%
1,9%
8,5%
18,9%
7,5%
10,0%
11,5%
16,9%
0% 5% 10% 15% 20% 25%
Financials
Cons. Discretionary
Telecom Svcs
Health Care
Info Tech
Industrials
Energy
Materials
Cons Staples
Utilities
Templeton Growth (Euro) FundMSCI World Index (in EUR)
Sector Allocation – Templeton Growth (Euro) Fund vs. MSCI World Index (in EUR)
42
Dealer Use Only / Not for Distribution to the Public
Templeton Growth (Euro) FundTop 10 Holdings
Country Industry Group Pct of Total
1. Microsoft Corp 3.5%
2. Siemens AG
Software and ServicesUnited States
Germany
3. Oracle Corp United States Software and Services 2.7%
4. News Corp Inc United States Media 2.4%
5. General Electric United States Capital Goods 2.4%
6. Seagate Technology United States Technology Hardware & Equipment 2.3%
7. BMW Germany Automobiles & Components 2.0%
8. Pfizer Inc United States Pharmaceuticals, Biotechnology & Life Sciences 2.0%
9. France Telecom Netherlands Telecommunication Services
3.4%
1.9%
Capital Goods
United States Pharmaceuticals, Biotechnology & Life Sciences10. BP PLC 1.9%
Source: Franklin Templeton Performance Dept. As of December 2007. All Data Represents Gross Returns. These securities represent the ten largest holdings held in 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. Holdings are subject to change.
Gross Returns as of December 31, 2007: Returns in US-Dollar
Dealer Use Only / Not for Distribution to the Public
Fund Performance
44
Dealer Use Only / Not for Distribution to the Public
Templeton Growth (Euro) FundPerformance in EUR
Performance data may represent blended share class performance, e.g. hybrid created from an A(dis) share class which was converted to A(acc).All MSCI data is provided “as is.” The portfolio 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 portfolio described herein. Copying or redistributing the MSCI data is strictly prohibited.
45
Dealer Use Only / Not for Distribution to the Public
Market Capitalization (Millions EUR)
Fund
Benchmark
62,026.22
52,130.44
Price to Earnings Price to Book Value
Fund
Benchmark
1.95x
2.48x
Fund
Benchmark
14.46x
15.67x
Price to Cash Flow
Fund
Benchmark
6.75x
10.59x
Dividend Yield
Fund
Benchmark
2.41%
2.30%
Templeton Growth (Euro) FundFundamental Portfolio Characteristics
46
Dealer Use Only / Not for Distribution to the Public
Franklin Templeton Investments
This presentation was issued by Franklin Templeton Investments. Please note that this is not a complete representation and/or analysis of every material fact regarding an industry, a security or the respective investment fund. The information given does not constitute an analysis of any security.The value of the shares can go down as well as up and is not guaranteed. You may not get back the full amount invested. Investors should be aware of the fact that the fund invests in markets which can be very risky and volatile and that it may be difficult for the fund to sell its holdings. The performance data stated are examples and do not represent an offer to buy or to sell. Franklin Templeton Investments publishes product-related information only and does not give any investment recommendations. SICAV shares may not be offered to citizens or residents of the United States of America, no matter whether directly or indirectly.
Subscriptions for shares in the funds can only be made on the basis of the relevant prospectus which describes in detail the risks inherent in this investment and to which the current accounting report of the respective fund is attached. Please consult your professional advisor for advice. On request we will be happy to refer you to one of our independent dealers.
Selling prospectuses and further documentation are available free of charge from your advisor or at:
Franklin Templeton Investment Services GmbHPostfach 11 18 03, D-60053 Frankfurt a. M., Mainzer Landstraße 16, D-60325 Frankfurt a. M.Tel.: 0800/0738001 (Germany), 0800/295911(Austria), Fax +49(0)69/27223-120Email: [email protected] (Germany), [email protected] (Austria)Internet: www.franklintempleton.de (Germany), www.franklintempleton.at (Austria)