After remaining at the helm for nearly quarter of a century, Mark Mobius has decided to step down as the lead manager of the Templeton Emerging Markets Investment Trust (TEMIT) and will hand over control of the fund to Carlos Hardenberg on October 1.
Mobius, however, will remain on the portfolio management team of the trust (TEMIT).
“The Board of Templeton Emerging Markets Investment Trust PLC1 (TEMIT) announces that, with effect from 1 October 2015 and subject to regulatory approvals, Carlos Hardenberg, senior vice president and managing director, Templeton Emerging Markets Group will be named lead portfolio manager of TEMIT working alongside Dr. J. Mark Mobius, executive chairman of Templeton Emerging Markets Group, who remains as a portfolio manager on the fund,” Templeton Emerging Markets Investment Trust Plc said in a statement.
"In addition, Chetan Sehgal, executive vice president and managing director, Templeton Emerging Markets Group will continue to serve as senior research analyst on the investment team,” it added.
TEMIT, which was launched in June 1989, was one of the first dedicated emerging markets funds in the UK to offer access to some of the fastest growing economies around the world. It's research-driven investment approach and strong performance has helped it to grow to be the largest emerging market investment trust in the UK, with assets of £2 billion as at 31 March 2015.
“The Templeton Emerging Markets Group routinely reviews portfolio management assignments and makes changes based on what we believe is in the best interests of our clients. The Group and I also continuously evaluate how to bring out the best from our investment talent,” Mark Mobius said commenting on the development.
“The appointment of Mr. Hardenberg as lead portfolio manager with continued support by Mr. Sehgal as senior research analyst on TEMIT, is an acknowledgment of their significant contributions to the Templeton Emerging Markets team and TEMIT’s desire to benefit from a more dedicated application of their considerable skills to the TEMIT portfolio,” he added.
In its annual report and audited accounts for 2015, Peter A Smith, chairman, Templeton Emerging Markets Investment Trust PLC, however, had acknowledged TEMIT’s investment performance to be significantly lagging its benchmark.
“It is very disappointing to report that TEMIT’s investment performance has significantly lagged its benchmark for last year, and now for the last five years. Shareholders should be reassured that your Board is well aware of this, and tests the investment model with the Investment Manager at each quarterly board meeting,” Smith said.
Also Read: Also Read: Five reasons Mobius remains bullish on EMs
Adding: “Despite this run of poor returns, the Investment Manager remains convinced that the prospects for emerging country economies will eventually translate into market returns which will outweigh the inevitable risks of such investment. Shareholders will note that some of the more recent purchases are in consumer-facing companies at relatively depressed valuations.”
While they still make money, 11 of the 13 largest funds that Mobius oversees at Franklin Templeton Investments have underperformed their benchmarks over the past five years, a recent Bloomberg report suggested.
“At his zenith in 2011, Mobius oversaw $39 billion. Today that figure is down to $26 billion. The bottom line: Mobius's flagship fund has gained 4.3 per cent annually over the past five years, trailing 44 of 46 similar funds,” the Bloomberg report adds.
Recently, Mobius invested an undisclosed sum as angel capital in Mumbai-based engineering start-up Entropy Innovations. The deal was advised and syndicated by ah! Ventures and led to closure on its private equity investment platform, CLUBah.com. Founded in 2013 by IIT and IIM alumni, Entropy Innovations has manufactured an automatic motorcycle wash machine - 'Express Bike Wash'. CLICK HERE FOR THE STORY