UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04985
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TEMPLETON EMERGING MARKETS FUND
---------------------------------
(Exact name of registrant as specified in charter)
500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091
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(Address of principal executive offices) (Zip code)
CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)
Registrant's telephone number, including area code: (954) 527-7500
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Date of fiscal year end: 8/31
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Date of reporting period: 2/28/10
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ITEM 1. REPORTS TO STOCKHOLDERS.
FEBRUARY 28, 2010
SEMIANNUAL REPORT
(GRAPHIC)
INTERNATIONAL
TEMPLETON
EMERGING MARKETS FUND
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)
Franklin - TEMPLETON - Mutual Series
Franklin Templeton Investments
GAIN FROM OUR PERSPECTIVE(R)
Franklin Templeton's distinct multi-manager structure
combines the specialized expertise of three
world-class investment management groups--Franklin,
Templeton and Mutual Series.
SPECIALIZED EXPERTISE Each of our portfolio management groups
operates autonomously, relying on its own research
and staying true to the unique investment disciplines
that underlie its success.
FRANKLIN. Founded in 1947, Franklin is a recognized
leader in fixed income investing and also brings
expertise in growth- and value-style U.S. equity
investing.
TEMPLETON. Founded in 1940, Templeton
pioneered international investing and, in 1954,
launched what has become the industry's oldest global
fund. Today, with offices in over 25 countries,
Templeton offers investors a truly global
perspective.
MUTUAL SERIES. Founded in 1949, Mutual Series is
dedicated to a unique style of value investing,
searching aggressively for opportunity among what it
believes are undervalued stocks, as well as arbitrage
situations and distressed securities.
TRUE DIVERSIFICATION Because our management groups work independently
and adhere to different investment approaches,
Franklin, Templeton and Mutual Series funds typically
have distinct portfolios. That's why our funds can be
used to build truly diversified allocation plans
covering every major asset class.
RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we
seek to consistently provide investors with
exceptional risk-adjusted returns over the long term,
as well as the reliable, accurate and personal
service that has helped us become one of the most
trusted names in financial services.
MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
(GRAPHIC)
Not part of the semiannual report
Contents
SEMIANNUAL REPORT
Templeton Emerging Markets Fund ........................................... 1
Performance Summary ....................................................... 5
Important Notice to Shareholders .......................................... 6
Financial Highlights and Statement of Investments ......................... 8
Financial Statements ...................................................... 12
Notes to Financial Statements ............................................. 15
Annual Meeting of Shareholders ............................................ 21
Dividend Reinvestment and Cash Purchase Plan .............................. 22
Shareholder Information ................................................... 25
Semiannual Report
Templeton Emerging Markets Fund
YOUR FUND'S GOAL AND MAIN INVESTMENTS: Templeton Emerging Markets Fund seeks
long-term capital appreciation by investing, under normal market conditions, at
least 80% of its net assets in emerging country equity securities.
GEOGRAPHIC BREAKDOWN
Based on Total Net Assets as of 2/28/10
(BAR CHART)
Asia 56.2%
Latin America & Caribbean 24.4%
Europe 19.1%
Middle East & Africa 0.1%
Short-Term Investments &
Other Net Assets 0.2%
Dear Shareholder:
We are pleased to bring you Templeton Emerging Markets Fund's semiannual report
for the period ended February 28, 2010.
PERFORMANCE OVERVIEW
Templeton Emerging Markets Fund delivered cumulative total returns of +20.57%
based on market price and +19.47% based on net asset value for the six months
under review.
ECONOMIC AND MARKET OVERVIEW
Emerging market equities were volatile in the six months under review. In the
earlier part of the reporting period, stocks continued their upward trend, which
was supported by strong gross domestic product (GDP) growth resulting from
successful government-implemented stimulus programs. However, after reaching a
17-month high in January 2010, emerging market stocks succumbed to renewed
concerns about the global recovery's strength. Debt crises in Greece and Dubai
raised concerns about the financial strength of some European and Middle Eastern
countries and, in Asia, China's incremental tightening monetary
THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 9.
Semiannual Report | 1
TOP 10 COUNTRIES
Based on Equity Investments as of 2/28/10
% OF TOTAL
NET ASSETS
----------
Brazil 22.2%
China 15.4%
India 14.1%
Thailand 8.4%
Russia 7.9%
Turkey 6.7%
Hong Kong 6.4%
South Korea 5.3%
Indonesia 4.9%
Mexico 2.2%
policies added to investor anxieties surrounding the government's withdrawal of
stimulus measures and its impact on the world economy. Toward period-end,
investor worries eased as fund flows into emerging markets turned positive. For
the six-month reporting period, emerging markets stocks, represented by the
Morgan Stanley Capital International (MSCI) Emerging Markets (EM) Index,
delivered a +12.28% total return in U.S. dollar terms.1 Part of this return was
the result of stronger emerging market currencies.
On a regional basis, Latin America was the top performer for the review period.
Higher commodity prices and stronger domestic currencies supported the region's
equity prices. In Asia, top performing markets included India, Indonesia and
Thailand. China also ended the reporting period with a positive return despite
its measures to curb excessive bank lending and overheating in certain sectors.
Eastern European markets posted mixed results due, in part, to credit crunch
concerns. The Czech Republic, Hungary and Poland underperformed their emerging
market peers, while Russia significantly outperformed with a +23.32% total
return in U.S. dollar terms.(1) Higher oil prices and investors' search for
undervalued stocks helped boost Russian stock prices. Despite Turkey's credit
rating upgrade, the country's stock market suffered sharp drops in February that
erased most of its gains, largely due to political instability, a weaker lira
and fears of contagion from Greece's sovereign debt problems.
INVESTMENT STRATEGY
Our investment strategy employs a bottom-up, value-oriented, long-term approach.
We focus on the market price of a company's securities relative to our
evaluation of the company's long-term earnings, asset value and cash flow
potential. As we look for investments, we focus on specific companies and
undertake in-depth research to construct an action list from which we make our
buy decisions. Before we make a purchase, we look at the company's potential for
earnings and growth over a five-year horizon. During our analysis, we also
consider the company's position in its sector, the economic framework and
political environment.
(1.) Source: (C) 2010 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. Past performance is no guarantee of future results. The
MSCI EM Index is a free float-adjusted, market capitalization-weighted
index designed to measure equity market performance in global emerging
markets. Country and regional returns are from subindexes of the MSCI EM
Index. One cannot invest directly in an index, and an index is not
representative of the Fund's portfolio.
2 | Semiannual Report
MANAGER'S DISCUSSION
During the six months under review, some of the Fund's most significant
contributors to absolute performance included India's Sesa Goa, a leading iron
ore miner and exporter, Brazil's Vale, one of the world's largest iron ore
producers, and Petrobras (Petroleo Brasileiro), Brazil's national oil and gas
company. Higher commodity prices had a positive impact on energy and metals and
mining stocks and, in our view, these stocks could continue to benefit from a
long-term upward trend in commodity prices and strong demand for oil and gas and
raw materials. In line with our strategy, we considered many commodity-related
companies attractive investment opportunities, and we believed they could remain
profitable.
In contrast, some of the largest detractors from the Fund's absolute performance
included Turkey's Akbank, South Korea's Hyundai Development and China's Chalco
(Aluminum Corp. of China) during the reporting period. Akbank is one of Turkey's
biggest commercial banks. Its stock price fell amid worries regarding a
difficult political environment and possible contagion of Greece's economic
problems. We remained confident in the company's long-term prospects based on
what we viewed as its good asset quality and relatively strong market position.
Shares of Hyundai Development, a leading residential property developer,
declined in value largely due to the adverse impact that uncertainty in the
global economic situation had on housing demand. However, a low interest rate
environment and strong brand recognition and market position supported the
company, and we considered its stock attractively valued. The share price of
alumina and primary aluminum products producer Chalco declined mainly as a
result of Russian competitor Rusal's listing on the Hong Kong Stock Exchange,
which divided local investors seeking exposure to the aluminum sector. Over the
long term, we believe Chalco remains well positioned to gain from rapid growth
in China's aluminum consumption.
In the review period, we increased the Fund's Asian holdings due to their
attractive fundamentals in our view. Specifically, we made purchases in
Pakistan, Thailand, India and South Korea and, as a result, the Fund's exposure
was higher to diversified banking; apparel, accessories and luxury goods; marine
ports and services; and real estate management and development companies. Key
additions to existing positions included Pakistani commercial banks MCB Bank and
Faysal Bank, Chinese port operator Chiwan Wharf Holdings, and Indian real estate
developer Peninsula Land. Conversely, we made only one sale during the reporting
period as we trimmed the Fund's exposure to PetroChina, the country's largest
oil and gas company.
TOP 10 HOLDINGS
2/28/10
COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
------------------------ ----------
Petrobras (Petroleo Brasileiro SA),
ADR, pfd. 7.7%
OIL, GAS & CONSUMABLE FUELS, BRAZIL
Vale SA, ADR, pfd., A 7.1%
METALS & MINING, BRAZIL
Sesa Goa Ltd. 7.0%
METALS & MINING, INDIA
Akbank TAS 4.4%
COMMERCIAL BANKS, TURKEY
Itau Unibanco Holding SA, ADR 4.0%
COMMERCIAL BANKS, BRAZIL
Denway Motors Ltd. 3.7%
AUTOMOBILES, CHINA
Banco Bradesco SA, ADR, pfd. 3.5%
COMMERCIAL BANKS, BRAZIL
PetroChina Co. Ltd., H 3.1%
OIL, GAS & CONSUMABLE FUELS, CHINA
Dairy Farm International Holdings Ltd. 3.1%
FOOD & STAPLES RETAILING, HONG KONG
Tata Consultancy Services Ltd. 3.0%
IT SERVICES, INDIA
Semiannual Report | 3
Thank you for your continued participation in Templeton Emerging Markets Fund.
We look forward to serving your future investment needs.
Sincerely,
(PHOTO OF MARK MOBIUS)
/s/ Mark Mobius
Mark Mobius
Executive Chairman
Templeton Asset Management Ltd.
THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF FEBRUARY 28, 2010, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT
OUR MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.
4 | Semiannual Report
Performance Summary as of 2/28/10
Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses. Capital
gain distributions are net profits realized from the sale of portfolio
securities. Total return reflects reinvestment of the Fund's dividends and
capital gain distributions, if any, and any unrealized gains or losses. Total
returns do not reflect any sales charges paid at inception or brokerage
commissions paid on secondary market purchases. The performance table does not
reflect any taxes that a shareholder would pay on Fund dividends, capital gain
distributions, if any, or any realized gains on the sale of Fund shares.
PRICE AND DISTRIBUTION INFORMATION
SYMBOL: EMF CHANGE 2/28/10 8/31/09
----------- ------ ------- -------
Net Asset Value (NAV) +$2.92 $18.60 $15.68
Market Price (NYSE) +$2.96 $17.98 $15.02
DISTRIBUTIONS (9/1/09-2/28/10)
Dividend Income $0.1407
PERFORMANCE
6-MONTH 1-YEAR 5-YEAR 10-YEAR
------- ------- ------ -------
Cumulative Total Return(1)
Based on change in NAV(2) +19.47% +117.59% +94.73% +183.06%
Based on change in market price(3) +20.57% +133.37% +75.99% +215.50%
Average Annual Total Return(1)
Based on change in NAV(2) +19.47% +117.59% +14.26% +10.97%
Based on change in market price(3) +20.57% +133.37% +11.97% +12.18%
PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN.
ENDNOTES
SPECIAL RISKS ARE ASSOCIATED WITH FOREIGN INVESTING, INCLUDING CURRENCY
VOLATILITY, ECONOMIC INSTABILITY AND POLITICAL DEVELOPMENTS OF COUNTRIES WHERE
THE FUND INVESTS. EMERGING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME
FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THEIR RELATIVELY SMALL SIZE AND
LESSER LIQUIDITY.
(1.) Total return calculations represent the cumulative and average annual
changes in value of an investment over the periods indicated. Six-month
return has not been annualized.
(2.) Assumes reinvestment of distributions based on net asset value.
(3.) Assumes reinvestment of distributions based on the dividend reinvestment
and cash purchase plan.
Semiannual Report | 5
Important Notice to Shareholders
SHARE REPURCHASE PROGRAM
The Fund's Board previously authorized management to implement an open-market
share repurchase program pursuant to which the Fund may purchase Fund shares,
from time to time, in open-market transactions, at the discretion of management.
This authorization remains in effect.
PARTICIPATORY NOTES
In trying to achieve its investment goals, the Fund may invest in participatory
notes. A participatory note, as used by the Fund, is an instrument used by
investors to obtain exposure to an equity investment, including common stocks
and warrants, in a local market where direct ownership is not permitted. In
countries where direct ownership by a foreign investor, such as the Fund, is not
allowed by local law, such as Saudi Arabia, an investor may gain exposure to the
market through a participatory note, which derives its value from a group of
underlying equity securities. A participatory note is intended (disregarding the
effect of any fees and expenses) to reflect the performance of the underlying
equity securities on a one-to-one basis so that investors will not normally gain
more in absolute terms than they would have made had they invested in the
underlying securities directly, and will not normally lose more than they would
have lost had they invested in the underlying securities directly.
In addition to providing access to otherwise closed markets, participatory notes
can also provide a less expensive option to direct investment (where ownership
by foreign investors is permitted) by reducing registration and transaction
costs in acquiring and selling local registered shares. The Fund's investment
manager also believes that participatory notes can offer greater liquidity in
markets that restrict the ability of the Fund to dispose of an investment by
either restricting transactions by size or requiring registration and/or
regulatory approvals.
Participatory notes are generally structured and sold by a local branch of a
bank or broker-dealer that is permitted to purchase equity securities in the
local market. Pursuant to the terms of the instrument, the Fund may tender a
participatory note for cash payment in an amount that reflects the current
market value of the underlying investments, less program expenses, such as
trading costs, taxes and duties. The participatory notes represent unsecured,
unsubordi-nated contractual rights of the issuer of the participatory notes.
They do not confer any right, title or interest in respect to the underlying
equity securities or provide rights against the issuer of the underlying
securities.
6 | Semiannual Report
The purchase of participatory notes involves risks that are in addition to the
risks normally associated with a direct investment in the underlying securities.
The Fund is subject to the risk that the issuer of the participatory note (i.e.,
the issuing bank or broker-dealer), which is the only responsible party under
the note, is unable or refuses to perform under the terms of the participatory
note, also known as counterparty risk. While the holder of a participatory note
is entitled to receive from the bank or broker-dealer any dividends or other
distributions paid on the underlying securities, the holder is not entitled to
the same rights as an owner of the underlying securities, such as voting rights.
Participatory notes are also not traded on exchanges, are privately issued, and
may be illiquid. To the extent a participatory note is determined to be
illiquid, it would be subject to the Fund's nonfundamental investment policy
regarding investments in illiquid securities. There can be no assurance that the
trading price or value of participatory notes will equal the value of the
underlying value of the equity securities they seek to replicate.
Semiannual Report | 7
Templeton Emerging Markets Fund
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 2010 -------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
----------------- ---------- ---------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ................. $ 15.68 $ 19.11 $ 23.14 $ 20.56 $ 17.98 $ 13.40
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss)(a) ................... (0.02) 0.19 0.30 0.37 0.33 0.32
Net realized and unrealized gains (losses) ........ 3.08 (2.18) (2.16) 7.47 4.25 4.51
-------- -------- -------- -------- -------- --------
Total from investment operations ..................... 3.06 (1.99) (1.86) 7.84 4.58 4.83
-------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ............................. (0.14) (0.30) (0.34) (0.64) (0.39) (0.25)
Net realized gains ................................ -- (1.14) (1.83) (4.62) (1.61) --
-------- -------- -------- -------- -------- --------
Total distributions .................................. (0.14) (1.44) (2.17) (5.26) (2.00) (0.25)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....................... $ 18.60 $ 15.68 $ 19.11 $ 23.14 $ 20.56 $ 17.98
-------- -------- -------- -------- -------- --------
Market value, end of period(b) ....................... $ 17.98 $ 15.02 $ 17.63 $ 20.56 $ 18.94 $ 18.31
======== ======== ======== ======== ======== ========
Total return (based on market value per share)(c) .... 20.57% (1.27)% (6.16)% 41.62% 15.01% 30.66%
RATIOS TO AVERAGE NET ASSETS(d)
Expenses(e) .......................................... 1.52% 1.55% 1.55% 1.55% 1.58% 1.57%
Net investment income (loss) ......................... (0.18)% 1.55% 1.28% 1.86% 1.66% 2.00%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .................... $336,362 $283,401 $345,403 $418,213 $366,549 $318,240
Portfolio turnover rate .............................. 0.78% 13.03% 9.33% 33.15% 43.03% 36.04%
(a) Based on average daily shares outstanding.
(b) Based on the last sale on the New York Stock Exchange.
(c) Total return is not annualized for periods less than one year.
(d) Ratios are annualized for periods less than one year.
(e) Benefit of expense reduction rounds to less than 0.01%.
The accompanying notes are an integral part of these financial statements.
8 | Semiannual Report
Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED)
INDUSTRY SHARES VALUE
---------------------------------------- ---------- ------------
COMMON STOCKS 81.6%
AUSTRIA 1.0%
OMV AG ................................................. Oil, Gas & Consumable Fuels 89,020 $ 3,296,780
------------
BRAZIL 4.0%
Itau Unibanco Holding SA, ADR .......................... Commercial Banks 666,033 13,294,019
------------
CHINA 15.4%
(a) Aluminum Corp. of China Ltd., H ........................ Metals & Mining 9,792,000 9,461,174
(a) Brilliance China Automotive Holdings Ltd. .............. Automobiles 32,040,000 8,668,105
China Petroleum and Chemical Corp., H .................. Oil, Gas & Consumable Fuels 7,136,000 5,598,665
Chiwan Wharf Holdings Ltd., B .......................... Transportation Infrastructure 2,126,967 3,433,399
Denway Motors Ltd. ..................................... Automobiles 22,188,730 12,348,908
PetroChina Co. Ltd., H ................................. Oil, Gas & Consumable Fuels 9,248,000 10,293,758
Win Hanverky Holdings Ltd. ............................. Textiles, Apparel & Luxury Goods 11,152,000 1,867,706
------------
51,671,715
------------
HONG KONG 6.4%
Dairy Farm International Holdings Ltd. ................. Food & Staples Retailing 1,658,100 10,263,639
Victory City International Holdings Ltd. ............... Textiles, Apparel & Luxury Goods 28,152,000 7,434,906
VTech Holdings Ltd. .................................... Communications Equipment 392,500 3,949,145
------------
21,647,690
------------
HUNGARY 1.2%
(a) MOL Hungarian Oil and Gas Nyrt ......................... Oil, Gas & Consumable Fuels 45,775 4,113,776
------------
INDIA 14.1%
National Aluminium Co. Ltd. ............................ Metals & Mining 665,030 5,552,615
Oil & Natural Gas Corp. Ltd. ........................... Oil, Gas & Consumable Fuels 270,795 6,560,927
Peninsula Land Ltd. .................................... Real Estate Management & Development 846,798 1,495,052
Sesa Goa Ltd. .......................................... Metals & Mining 2,716,280 23,563,088
Tata Consultancy Services Ltd. ......................... IT Services 617,600 10,193,983
------------
47,365,665
------------
INDONESIA 4.9%
PT Astra International Tbk ............................. Automobiles 2,195,000 8,523,701
PT Bank Central Asia Tbk ............................... Commercial Banks 15,134,500 7,903,662
------------
16,427,363
------------
MEXICO 2.2%
Wal-Mart de Mexico SAB de CV, V ........................ Food & Staples Retailing 1,511,000 7,503,322
------------
PAKISTAN 1.7%
(a) Faysal Bank Ltd. ....................................... Commercial Banks 10,190,739 1,948,388
MCB Bank Ltd. .......................................... Commercial Banks 1,462,645 3,658,588
------------
5,606,976
------------
POLAND 0.3%
(a) Polnord SA ............................................. Construction & Engineering 92,806 1,044,528
------------
Semiannual Report | 9
Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
INDUSTRY SHARES VALUE
---------------------------------------- ---------- ------------
COMMON STOCKS (CONTINUED)
RUSSIA 7.9%
Gazprom, ADR ........................................... Oil, Gas & Consumable Fuels 241,722 $ 5,390,401
LUKOIL Holdings, ADR ................................... Oil, Gas & Consumable Fuels 101,006 5,372,509
LUKOIL Holdings, ADR (London Exchange) ................. Oil, Gas & Consumable Fuels 36,510 1,916,775
(a) Mining and Metallurgical Co. Norilsk Nickel ............ Metals & Mining 44,679 6,753,715
Mobile TeleSystems, ADR ................................ Wireless Telecommunication Services 77,300 4,046,655
OAO TMK ................................................ Energy Equipment & Services 660,934 2,947,543
------------
26,427,598
------------
SOUTH AFRICA 0.1%
Impala Platinum Holdings Ltd. .......................... Metals & Mining 18,800 457,163
------------
SOUTH KOREA 5.3%
Avista Inc. ............................................ Textiles, Apparel & Luxury Goods 347,028 1,169,724
Hyundai Development Co. ................................ Construction & Engineering 165,470 4,764,395
Neopharm Co. Ltd. ...................................... Personal Products 302,793 1,923,779
SK Energy Co. Ltd. ..................................... Oil, Gas & Consumable Fuels 109,364 10,087,886
------------
17,945,784
------------
TAIWAN 0.0%(b)
MediaTek Inc. .......................................... Semiconductors & Semiconductor Equipment 908 14,271
------------
THAILAND 8.4%
Amata Corp. Public Co. Ltd., fgn. ...................... Real Estate Management & Development 7,206,800 1,635,184
Hemaraj Land and Development Public Co. Ltd., fgn. ..... Real Estate Management & Development 29,653,100 708,696
Kasikornbank Public Co. Ltd., fgn. ..................... Commercial Banks 2,251,200 6,129,421
Kiatnakin Bank Public Co. Ltd., fgn. ................... Consumer Finance 8,084,600 6,114,506
Land and Houses Public Co. Ltd., fgn. .................. Real Estate Management & Development 8,514,132 1,584,084
PTT Exploration and Production Public Co. Ltd., fgn. ... Oil, Gas & Consumable Fuels 1,226,600 5,009,560
PTT Public Co. Ltd., fgn. .............................. Oil, Gas & Consumable Fuels 578,000 4,056,754
Siam Cement Public Co. Ltd., fgn. ...................... Construction Materials 415,120 2,875,888
------------
28,114,093
------------
TURKEY 6.7%
Akbank TAS ............................................. Commercial Banks 2,952,231 14,888,085
Tupras-Turkiye Petrol Rafinerileri AS .................. Oil, Gas & Consumable Fuels 427,186 7,733,373
------------
22,621,458
------------
UNITED KINGDOM 2.0%
(a) Anglo American PLC ..................................... Metals & Mining 189,200 6,772,013
------------
TOTAL COMMON STOCKS
(COST $186,338,321) ................................. 274,324,214
------------
10 | Semiannual Report
Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
INDUSTRY SHARES VALUE
---------------------------------------- ---------- ------------
PREFERRED STOCKS 18.2%
BRAZIL 18.2%
Banco Bradesco SA, ADR, pfd. ........................... Commercial Banks 686,644 $ 11,885,808
Petroleo Brasileiro SA, ADR, pfd. ...................... Oil, Gas & Consumable Fuels 670,320 25,740,288
Vale SA, ADR, pfd., A .................................. Metals & Mining 966,300 23,770,980
------------
TOTAL PREFERRED STOCKS
(COST $18,224,142) .................................. 61,397,076
------------
TOTAL INVESTMENTS BEFORE SHORT TERM INVESTMENTS
(COST $204,562,463) ................................. 335,721,290
------------
SHORT TERM INVESTMENTS (COST $1,045,074) 0.3%
MONEY MARKET FUNDS 0.3%
UNITED STATES 0.3%
(c) Institutional Fiduciary Trust Money Market Portfolio,
0.00% ............................................... 1,045,074 1,045,074
------------
TOTAL INVESTMENTS (COST $205,607,537) 100.1% ........... 336,766,364
OTHER ASSETS, LESS LIABILITIES (0.1)% .................. (404,539)
------------
NET ASSETS 100.0% ...................................... $336,361,825
============
See Abbreviations on page 20.
(a) Non-income producing.
(b) Rounds to less than 0.1% of net assets.
(c) See Note 7 regarding investments in the Institutional Fiduciary Trust Money
Market Portfolio. The rate shown is the annualized seven-day yield at
period end.
The accompanying notes are an integral part of these financial statements.
Semiannual Report | 11
Templeton Emerging Markets Fund
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2010 (unaudited)
Assets:
Investments in securities:
Cost - Unaffiliated issuers .................... $204,562,463
Cost - Sweep Money Fund (Note 7) ............... 1,045,074
------------
Total cost of investments ...................... $205,607,537
============
Value - Unaffiliated issuers ................... $335,721,290
Value - Sweep Money Fund (Note 7) .............. 1,045,074
------------
Total value of investments ..................... 336,766,364
Receivables:
Dividends ...................................... 802,525
Foreign tax .................................... 13,361
------------
Total assets ................................ 337,582,250
------------
Liabilities:
Payables:
Investment securities purchased ................ 30,833
Affiliates ..................................... 354,730
Custodian fees ................................. 79,048
Deferred tax ...................................... 728,332
Accrued expenses and other liabilities ............ 27,482
------------
Total liabilities ........................... 1,220,425
------------
Net assets, at value ..................... $336,361,825
============
Net assets consist of:
Paid-in capital ................................... $212,488,707
Distributions in excess of net investment income .. (299,662)
Net unrealized appreciation (depreciation) ........ 130,425,505
Accumulated net realized gain (loss) .............. (6,252,725)
------------
Net assets, at value ..................... $336,361,825
============
Shares outstanding ................................... 18,085,107
============
Net asset value per share ............................ $ 18.60
============
The accompanying notes are an integral part of these financial statements.
12 | Semiannual Report
Templeton Emerging Markets Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
for the six months ended February 28, 2010 (unaudited)
Investment income:
Dividends (net of foreign taxes of $207,915) ................... $ 2,235,159
-----------
Expenses:
Management fees (Note 3a) ...................................... 2,077,232
Administrative fees (Note 3b) .................................. 249,449
Transfer agent fees ............................................ 32,609
Custodian fees (Note 4) ........................................ 95,452
Reports to shareholders ........................................ 17,051
Registration and filing fees ................................... 13,709
Professional fees .............................................. 23,757
Trustees' fees and expenses .................................... 14,386
Other .......................................................... 11,179
-----------
Total expenses ........................................... 2,534,824
Expense reductions (Note 4) .............................. (3)
-----------
Net expenses .......................................... 2,534,821
-----------
Net investment income (loss) ....................... (299,662)
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ................................................. 332,748
Foreign currency transactions ............................... (10,141)
-----------
Net realized gain (loss) .............................. 322,607
-----------
Net change in unrealized appreciation (depreciation) on:
Investments ................................................. 55,476,910
Translation of other assets and liabilities denominated in
foreign currencies ....................................... (4,728)
Change in deferred taxes on unrealized appreciation ............ (228,114)
-----------
Net change in unrealized appreciation
(depreciation) ..................................... 55,244,068
-----------
Net realized and unrealized gain (loss) ........................... 55,566,675
-----------
Net increase (decrease) in net assets resulting from operations ... $55,267,013
===========
The accompanying notes are an integral part of these financial statements.
Semiannual Report | 13
Templeton Emerging Markets Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
FEBRUARY 28, 2010 YEAR ENDED
(UNAUDITED) AUGUST 31, 2009
----------------- ---------------
Increase (decrease) in net assets:
Operations:
Net investment income (loss) ........................................... $ (299,662) $ 3,421,448
Net realized gain (loss) from investments and foreign currency
transactions ........................................................ 322,607 (6,378,270)
Net change in unrealized appreciation (depreciation) on investments,
translation of other assets and liabilities denominated in foreign
currencies and deferred taxes ....................................... 55,244,068 (32,955,151)
------------- ------------
Net increase (decrease) in net assets resulting from operations ..... 55,267,013 (35,911,973)
------------- ------------
Distributions to shareholders from:
Net investment income .................................................. (2,542,876) (5,503,239)
Net realized gains ..................................................... -- (20,586,992)
------------- ------------
Total distributions to shareholders ....................................... (2,542,876) (26,090,231)
------------- ------------
Capital share transactions: (Note 2) ...................................... 236,892 --
------------- ------------
Net increase (decrease) in net assets ............................... 52,961,029 (62,002,204)
Net assets:
Beginning of period ....................................................... 283,400,796 345,403,000
------------- ------------
End of period ............................................................. $ 336,361,825 $283,400,796
------------- ------------
Undistributed net investment income (distributions in excess of net
investment income) included in net assets:
End of period ............................................................. $ (299,662) $ 2,542,876
============= ============
The accompanying notes are an integral part of these financial statements.
14 | Semiannual Report
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Emerging Markets Fund (Fund) is registered under the Investment
Company Act of 1940, as amended, (1940 Act) as a closed-end investment company.
The following summarizes the Fund's significant accounting policies.
A. SECURITY VALUATION
Equity and other securities listed on a securities exchange or on the NASDAQ
National Market System are valued at the last quoted sale price or the official
closing price of the day, respectively. Over-the-counter securities and listed
securities for which there is no reported sale are valued within the range of
the most recent quoted bid and ask prices. Securities that trade in multiple
markets or on multiple exchanges are valued according to the broadest and most
representative market. Certain equity securities are valued based upon
fundamental characteristics or relationships to similar securities. Investments
in open-end mutual funds are valued at the closing net asset value.
Foreign equity securities are valued as of the close of trading on the foreign
stock exchange on which the security is primarily traded, or the NYSE, whichever
is earlier. If no sale is reported at that time, the foreign equity security
will be valued within the range of the most recent quoted bid and ask prices.
The value is then converted into its U.S. dollar equivalent at the foreign
exchange rate in effect at the close of the NYSE on the day that the value of
the security is determined.
The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis based upon the underlying investment book value,
anticipated future cash flows, market changes in comparable or similar
securities, matrix pricing, discounts from market prices of similar securities,
or discounts applied due to the nature and duration of restrictions on the
disposition of the securities. Due to the inherent uncertainty of valuations of
such securities, the fair values may differ significantly from the values that
would have been used had a ready market for such investments existed.
Occasionally, events occur between the time at which trading in a security is
completed and the close of the NYSE that might call into question the
availability (including the reliability) of the value of a portfolio security
held by the Fund. The investment manager monitors price movements following the
close of trading in foreign stock markets through a series of country specific
market proxies (such as baskets of American Depository Receipts, futures
contracts and exchange traded funds). These price movements are measured against
established trigger thresholds for each specific market proxy to assist in
determining if an event has occurred. If such an event occurs, the securities
may be valued using fair value procedures, which may include the use of
independent pricing services. All security valuation procedures are approved by
the Fund's Board of Trustees.
Semiannual Report | 15
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. FOREIGN CURRENCY TRANSLATION
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. The Fund may enter
into foreign currency exchange contracts to facilitate transactions denominated
in a foreign currency. Purchases and sales of securities, income and expense
items denominated in foreign currencies are translated into U.S. dollars at the
exchange rate in effect on the transaction date. Occasionally, events may impact
the availability or reliability of foreign exchange rates used to convert the
U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate
will be valued at fair value using procedures established and approved by the
Fund's Board of Trustees.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments on the
Statement of Operations.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.
C. INCOME AND DEFERRED TAXES
No provision has been made for U.S. income taxes because it is the Fund's policy
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute to shareholders substantially all of its taxable income and net
realized gains.
The Fund has reviewed the tax positions, taken on federal income tax returns,
for each of the three open tax years and as of February 28, 2010, and has
determined that no provision for income tax is required in the Fund's financial
statements.
Foreign securities held by the Fund may be subject to foreign taxation on
dividend income received. Foreign taxes, if any, are recorded based on the tax
regulations and rates that exist in the foreign markets in which the Fund
invests.
The Fund may be subject to a tax imposed on net realized gains on securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities in an amount that would be payable
if the securities were disposed of on the valuation date.
16 | Semiannual Report
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Estimated expenses are accrued daily. Dividend income is recorded on the
ex-dividend date except that certain dividends from foreign securities are
recognized as soon as the Fund is notified of the ex-dividend date.
Distributions to shareholders are recorded on the ex-dividend date and are
determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States of
America. These differences may be permanent or temporary. Permanent differences
are reclassified among capital accounts to reflect their tax character. These
reclassifications have no impact on net assets or the results of operations.
Temporary differences are not reclassified, as they may reverse in subsequent
periods.
E. ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.
F. GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and trustees are
indemnified by the Fund against certain liabilities arising out of the
performance of their duties to the Fund. Additionally, in the normal course of
business, the Fund enters into contracts with service providers that contain
general indemnification clauses. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred. Currently, the Fund expects the
risk of loss to be remote.
2. SHARES OF BENEFICIAL INTEREST
At February 28, 2010, there were an unlimited number of shares authorized
(without par value). Transactions in the Fund's shares were as follows:
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2010 AUGUST 31, 2009
----------------- ---------------
SHARES AMOUNT SHARES AMOUNT
------ -------- ------ ------
Shares issued in reinvestment of distributions .. 12,074 $236,892 -- $--
====== ======== ====== ======
Semiannual Report | 17
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
The Fund's Board of Trustees previously authorized an open-market share
repurchase program pursuant to which the Fund may purchase, from time to time,
Fund shares in open-market transactions, at the discretion of management. This
authorization remains in effect. During the periods ended February 28, 2010 and
August 31, 2009, there were no shares repurchased.
3. TRANSACTIONS WITH AFFILIATES
Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:
SUBSIDIARY AFFILIATION
---------- ----------------------
Templeton Asset Management Ltd. (TAML) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
A. MANAGEMENT FEES
The Fund pays an investment management fee to TAML based on the average daily
net assets of the Fund as follows:
ANNUALIZED FEE RATE NET ASSETS
------------------- -------------------------------------------------
1.250% Up to and including $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% In excess of $20 billion
B. ADMINISTRATIVE FEES
The Fund pays an administrative fee to FT Services of 0.15% per year of the
average daily net assets of the Fund.
4. EXPENSE OFFSET ARRANGEMENT
The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended February 28, 2010, the
custodian fees were reduced as noted in the Statement of Operations.
18 | Semiannual Report
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. INCOME TAXES
For tax purposes, capital losses may be carried over to offset future capital
gains, if any. At August 31, 2009, the Fund had tax basis capital losses of
$1,375,872 expiring in 2017.
For tax purposes, realized capital losses occurring subsequent to October 31,
may be deferred and treated as occurring on the first day of the following
fiscal year. At August 31, 2009, the Fund deferred realized capital losses of
$3,998,148.
At February 28, 2010, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments ......................... $206,808,848
============
Unrealized appreciation ..................... $149,263,651
Unrealized depreciation ..................... (19,306,135)
------------
Net unrealized appreciation (depreciation) .. $129,957,516
============
Net investment income differs for financial statement and tax purposes primarily
due to differing treatment of foreign currency transactions.
Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales and foreign currency
transactions.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short term securities) for the
period ended February 28, 2010, aggregated $2,536,618 and $2,822,108,
respectively.
7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO
The Fund may invest in the Institutional Fiduciary Trust Money Market Portfolio
(Sweep Money Fund), an open-end investment company managed by Franklin Advisers,
Inc. (an affiliate of the investment manager). Pursuant to a SEC exemptive order
specific to the Fund's investment in the Sweep Money Fund, management fees paid
by the Fund are reduced on assets invested in the Sweep Money Fund, in an amount
not to exceed the management and administrative fees paid by the Sweep Money
Fund.
8. CONCENTRATION OF RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.
Semiannual Report | 19
Templeton Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
9. FAIR VALUE MEASUREMENTS
The Fund follows a fair value hierarchy that distinguishes between market data
obtained from independent sources (observable inputs) and the Fund's own market
assumptions (unobservable inputs). These inputs are used in determining the
value of the Fund's investments and are summarized in the following fair value
hierarchy:
- Level 1 - quoted prices in active markets for identical securities
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speed, credit risk,
etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.
At February 28, 2010, all of the Fund's investments in securities carried at
fair value were in Level 1 inputs. For detailed country descriptions, see the
accompanying Statement of Investments.
10. NEW ACCOUNTING PRONOUNCEMENTS
In January 2010, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) No. 2010-6, FAIR VALUE MEASUREMENTS AND
DISCLOSURES (TOPIC 820): IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS,
which enhances and clarifies existing fair value measurement disclosure
requirements and is effective for interim and annual periods beginning after
December 15, 2009. The Fund is currently evaluating the impact, if any, of
applying this provision.
In March 2010, the FASB issued ASU No. 2010-11, DERIVATIVES AND HEDGING (TOPIC
815): SCOPE EXCEPTION RELATED TO EMBEDDED CREDIT DERIVATIVES, which clarifies
existing derivatives and hedging disclosure requirements and is effective for
fiscal quarters beginning after June 15, 2010. The Fund is currently evaluating
the impact, if any, of applying this provision.
11. SUBSEQUENT EVENTS
The Fund has evaluated subsequent events through the issuance of the financial
statements and determined that no events have occurred that require disclosure.
ABBREVIATIONS
SELECTED PORTFOLIO
ADR - American Depository Receipt
20 | Semiannual Report
Templeton Emerging Markets Fund
ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 26, 2010
The Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 E. Broward Boulevard, Fort Lauderdale, Florida, on February 26, 2010. The
purpose of the meeting was to elect five Trustees of the Fund and to ratify the
selection of PricewaterhouseCoopers LLP as the independent registered public
accounting firm of the Fund for the fiscal year ending August 31, 2010. At the
meeting, the following persons were elected by the shareholders to serve as
Trustees of the Fund: Frank A. Olson, Constantine D. Tseretopoulos, Charles B.
Johnson, Gregory E. Johnson and J. Michael Luttig.* Shareholders also ratified
the selection of PricewaterhouseCoopers LLP as the independent registered public
accounting firm for the Fund for the fiscal year ending August 31, 2010. No
other business was transacted at the meeting.
The results of the voting at the Annual Meeting are as follows:
1. The election of five Trustees:
% OF % OF
SHARES SHARES
% OF PRESENT % OF PRESENT
OUTSTANDING AND OUTSTANDING AND
FOR SHARES VOTING WITHHELD SHARES VOTING
---------- ----------- ------- -------- ----------- -------
TERM EXPIRING 2013
Frank A. Olson .................. 14,556,802 80.54% 96.02% 603,410 3.34% 3.98%
Constantine D. Tseretopoulos .... 14,616,371 80.87% 96.41% 543,841 3.01% 3.59%
Charles B. Johnson .............. 14,608,644 80.83% 96.36% 551,568 3.05% 3.64%
Gregory E. Johnson .............. 14,605,115 80.81% 96.34% 555,097 3.07% 3.66%
TERM EXPIRING 2011
J. Michael Luttig ............... 14,595,245 80.76% 96.27% 564,967 3.13% 3.73%
2. The ratification of the selection of PricewaterhouseCoopers LLP as the
independent registered public accounting firm of the Fund for the fiscal year
ending August 31, 2010:
% OF % OF
SHARES OUTSTANDING VOTED
VOTED SHARES SHARES
---------- ----------- -------
For ............................. 14,882,610 82.35% 98.17%
Against ......................... 142,945 0.79% 0.94%
Abstain ......................... 134,658 0.75% 0.89%
Total ........................... 15,160,213 83.89% 100.00%
* Ann Torre Bates, David W. Niemiec, Larry D. Thompson, Robert E. Wade,
Harris J. Ashton, Frank J. Crothers and Edith E. Holiday are Trustees of
the Fund who are currently serving and whose terms of office continued
after the Annual Meeting of Shareholders.
Semiannual Report | 21
Templeton Emerging Markets Fund
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the "Plan") with
the following features:
Shareholders must affirmatively elect to participate in the Plan. If you decide
to use this service, share dividends and capital gains distributions will be
reinvested automatically in shares of the Fund for your account. BNY Mellon
Shareowner Services, P.O. Box 358015, Pittsburgh, PA 15252-8015, will provide
additional Plan information upon request.
Whenever the Fund declares dividends in either cash or shares of the Fund, if
the market price is equal to or exceeds net asset value at the valuation date,
the participant will receive the dividends entirely in new shares at a price
equal to the net asset value, but not less than 95% of the then current market
price of the Fund's shares. If the market price is lower than net asset value or
if dividends and/or capital gains distributions are payable only in cash, the
participant will receive shares purchased on the New York Stock Exchange or
otherwise on the open market.
A participant has the option of submitting additional cash payments to the Plan
Administrator, in any amounts of at least $100, up to a maximum of $5,000 per
month, for the purchase of Fund shares for his or her account. These payments
can be made by check or money order payable to The Bank of New York Mellon (the
"Plan Administrator") and sent to BNY Mellon Shareowner Services, P.O. Box
382009, Pittsburgh, PA 15250-8009, Attention: Templeton Emerging Markets Fund.
The Plan Administrator will apply such payments (less a $5.00 service charge and
less a pro rata share of trading fees) to purchases of Fund shares on the open
market.
The automatic reinvestment of dividends and/or capital gains does not relieve
the participant of any income tax that may be payable on dividends or
distributions.
Whenever shares are purchased on the New York Stock Exchange or otherwise on the
open market, each participant will pay a pro rata portion of trading fees.
Trading fees will be deducted from amounts to be invested. The Plan
Administrator's fee for a sale of shares through the Plan is $15.00 per
transaction plus a $0.12 per share trading fee.
A participant may withdraw from the Plan without penalty at any time by written
notice to the Plan Administrator sent to BNY Mellon Shareowner Services, P.O.
Box 358015, Pittsburgh, PA 15252-8015. Upon withdrawal, the participant will
receive, without charge, share certificates issued in the participant's name for
all full shares held by the Plan Administrator; or, if the participant wishes,
the Plan Administrator will sell the shares and send the proceeds to the
participant, less a service charge of $15.00 and less trading fees of $0.12 per
share. The Plan Administrator will convert any fractional shares held at the
time of withdrawal to cash at the current market price and send a check to the
participant for the net proceeds.
22 | Semiannual Report
Templeton Emerging Markets Fund
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
DIRECT DEPOSIT SERVICE FOR REGISTERED SHAREHOLDERS
Cash distributions can now be electronically credited to a checking or saving
account at any financial institution that participates in the Automated Clearing
House ("ACH") system. The Direct Deposit service is provided for registered
shareholders at no charge. To enroll in the service, access your account online
by going to http://vault.bnymellon.com/isd or dial 1-800-416-5585 (toll free)
and follow the instructions. Direct Deposit will begin with the next scheduled
distribution payment date following enrollment in the service.
Semiannual Report | 23
Templeton Emerging Markets Fund
TRANSFER AGENT
BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252-8015
1-800-416-5585
www.bnymellon.com
DIRECT REGISTRATION
If you are a registered shareholder of the Fund, purchases of shares of the Fund
can be electronically credited to your Fund account at BNY Mellon Shareowner
Services through Direct Registration. This service provides shareholders with a
convenient way to keep track of shares through book entry transactions,
electronically move book-entry shares between broker-dealers, transfer agents
and DRS eligible issuers, and eliminate the possibility of lost certificates.
For additional information, please contact BNY Mellon Shareowner Services at
1-800-416-5585.
SHAREHOLDER INFORMATION
Shares of Templeton Emerging Markets Fund are traded on the New York Stock
Exchange under the symbol "EMF." Information about the net asset value and the
market price is published each Monday in the WALL STREET JOURNAL, weekly in
BARRON'S and each Saturday in THE NEW YORK TIMES and other newspapers. Daily
market prices for the Fund's shares are published in the "New York Stock
Exchange Composite Transactions" section of newspapers.
For current information about dividends and shareholder accounts, call
1-800-416-5585. Registered shareholders can access their Fund account on-line
with INVESTOR SERVICEDIRECT(R). For information go to BNY Mellon Shareowner
Services' web site at https://vault.bnymellon.com/isd and follow the
instructions.
The daily closing net asset value as of the previous business day may be
obtained when available by calling Franklin Templeton Fund Information after 7
a.m. Pacific time any business day at 1-800/DIAL BEN(R) (1-800/342-5236). The
Fund's net asset value and dividends are also listed on the NASDAQ Stock Market,
Inc.'s Mutual Fund Quotation Service ("NASDAQ MFQS").
Shareholders not receiving copies of reports to shareholders because their
shares are registered in the name of a broker or a custodian can request that
they be added to the Fund's mailing list, by writing Templeton Emerging Markets
Fund, 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, FL 33733-8030.
24 | Semiannual Report
Templeton Emerging Markets Fund
SHAREHOLDER INFORMATION
PROXY VOTING POLICIES AND PROCEDURES
The Fund's investment manager has established Proxy Voting Policies and
Procedures (Policies) that the Fund uses to determine how to vote proxies
relating to portfolio securities. Shareholders may view the Fund's complete
Policies online at franklintempleton.com. Alternatively, shareholders may
request copies of the Policies free of charge by calling the Proxy Group collect
at (954) 527-7678 or by sending a written request to: Franklin Templeton
Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL
33394, Attention: Proxy Group. Copies of the Fund's proxy voting records are
also made available online at franklintempleton.com and posted on the U.S.
Securities and Exchange Commission's website at sec.gov and reflect the most
recent 12-month period ended June 30.
QUARTERLY STATEMENT OF INVESTMENTS
The Fund files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling (800)
SEC-0330.
CERTIFICATIONS
The Fund's Chief Executive Officer - Finance and Administration is required by
the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that she is not aware of any violation by the Fund of
the Exchange's Corporate Governance Standards applicable to the Fund. The Fund
has filed such certification.
In addition, the Fund's Chief Executive Officer - Finance and Administration and
Chief Financial Officer and Chief Accounting Officer are required by the rules
of the U.S. Securities and Exchange Commission to provide certain certifications
with respect to the Fund's Form N-CSR and Form N-CSRS (which include the Fund's
annual and semiannual reports to shareholders) that are filed semiannually with
the Commission. The Fund has filed such certifications with its Form N-CSR for
the year ended August 31, 2009. Additionally, the Fund expects to file, on or
about April 30, 2010, such certifications with its Form N-CSRS for the six
months ended February 28, 2010.
Semiannual Report | 25
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Franklin Templeton Funds
LITERATURE REQUEST. TO RECEIVE A PROSPECTUS, PLEASE CALL US AT (800) DIAL
BEN/(800) 342-5236 OR VISIT FRANKLINTEMPLETON.COM. INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE,
WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING
TONE.
VALUE
Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund(1)
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Quest Fund(2)
Mutual Recovery Fund(3)
Mutual Shares Fund
BLEND
Franklin Focused Core Equity Fund
Franklin Large Cap Equity Fund
Franklin Rising Dividends Fund
GROWTH
Franklin DynaTech Fund
Franklin Flex Cap Growth Fund
Franklin Growth Fund
Franklin Growth Opportunities Fund
Franklin Small Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
SECTOR
Franklin Biotechnology Discovery Fund
Franklin Global Real Estate Fund
Franklin Gold & Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Mutual Financial Services Fund
GLOBAL
Mutual Global Discovery Fund(4)
Templeton Global Long-Short Fund(5)
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund
INTERNATIONAL
Franklin India Growth Fund
Franklin International Growth Fund
Franklin International Small Cap Growth Fund
Mutual European Fund
Mutual International Fund
Templeton BRIC Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Emerging Markets Small Cap Fund
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Frontier Markets Fund
HYBRID
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Templeton Income Fund
ASSET ALLOCATION
Franklin Templeton Corefolio(R) Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives Allocation Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund
FIXED INCOME
Franklin Adjustable U.S. Government Securities Fund(6)
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund
Franklin Limited Maturity U.S. Government Securities Fund(6)
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund(6)
Templeton Global Bond Fund
Templeton Global Total Return Fund
Templeton International Bond Fund
TAX-FREE INCOME(7)
NATIONAL
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(8)
LIMITED-/INTERMEDIATE-TERM
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund
STATE-SPECIFIC
Alabama
Arizona
California(9)
Colorado
Connecticut
Florida
Georgia
Kentucky
Louisiana
Maryland
Massachusetts(10)
Michigan(10)
Minnesota(10)
Missouri
New Jersey
New York(9)
North Carolina
Ohio(10)
Oregon
Pennsylvania
Tennessee
Virginia
INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust(11)
(1.) The fund is closed to new investors. Existing shareholders and select
retirement plans can continue adding to their accounts.
(2.) Effective 5/1/09, Mutual Qualified Fund changed its name to Mutual Quest
Fund. The fund's investment goal and strategy remained unchanged.
(3.) The fund is a continuously offered, closed-end fund. Shares may be
purchased daily; there is no daily redemption. However, each quarter,
pending board approval, the fund will authorize the repurchase of 5%-25% of
the outstanding number of shares. Investors may tender all or a portion of
their shares during the tender period.
(4.) Effective 5/1/09, Mutual Discovery Fund changed its name to Mutual Global
Discovery Fund. The fund's investment goal and strategy remained unchanged.
(5.) Effective 12/18/09, this fund is closed to new investors, pending a
proposal to merge the fund into Templeton World Fund. Existing shareholders
may continue to make additional investments until shortly before the
completion of the transaction, expected in April 2010.
(6.) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
(7.) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are generally
taxable.
(8.) The fund invests primarily in insured municipal securities.
(9.) These funds are available in three or more variations, including long-term
portfolios, intermediate-term portfolios, portfolios of insured securities,
a high-yield portfolio (CA only) and a money market portfolio (CA only).
(10.) The Board of Trustees approved the elimination of the non-fundamental
policy requiring the fund to invest at least 80% of net assets in insured
municipal securities and the removal of the word "Insured" from the fund
name. The changes became effective 2/15/09.
(11.) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.
02/10 Not part of the semiannual report
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) 100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030
SEMIANNUAL REPORT
TEMPLETON EMERGING MARKETS FUND
INVESTMENT MANAGER
Templeton Asset Management Ltd.
TRANSFER AGENT
BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252-8015
Toll free number: (800) 416-5585
Hearing Impaired phone number: (800) 231-5469
Foreign Shareholders phone number: (201) 680-6578
www.melloninvestor.com/isd
FUND INFORMATION
(800) 342-5236
Investors should be aware that the value of investments made for the Fund may go
down as well as up. Like any investment in securities, the value of the Fund's
portfolio will be subject to the risk of loss from market, currency, economic,
political and other factors. The Fund and its investors are not protected from
such losses by the investment manager. Therefore, investors who cannot accept
this risk should not invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.
TLEMF S 04/10
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a
copy of its code of ethics that applies to its principal executive
officers and principal financial and accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The Registrant has an audit committee financial expert serving on its
audit committee.
(2) The audit committee financial expert is David W. Niemiec and he is
"independent" as defined under the relevant Securities and Exchange
Commission Rules and Releases.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Members of the Audit Committee are: Frank J. Crothers, David W. Niemiec,
Ann Torre Bates and Constantine D. Tseretopoulos.
ITEM 6. SCHEDULE OF INVESTMENTS. N/A
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The board of trustees of the Fund has delegated the authority to vote proxies
related to the portfolio securities held by the Fund to the Fund's manager
Franklin Advisers, Inc. in accordance with the Proxy Voting Policies and
Procedures (Policies) adopted by the manager.
The manager has delegated its administrative duties with respect to the voting
of proxies to the Proxy Group within Franklin Templeton Companies, LLC (Proxy
Group), an affiliate and wholly owned subsidiary of Franklin Resources, Inc. All
proxies received by the Proxy Group will be voted based upon the manager's
instructions and/or policies.
To assist it in analyzing proxies, the manager subscribes to RiskMetrics Group
(RiskMetrics), an unaffiliated third-party corporate governance research service
that provides in-depth analyses of shareholder meeting agendas, vote
recommendations, recordkeeping and vote disclosure services. In addition, the
manager subscribes to Glass, Lewis & Co., LLC (Glass Lewis), an unaffiliated
third-party analytical research firm, to receive analyses and vote
recommendations on the shareholder meetings of publicly held U.S. companies.
Although RiskMetrics' and/or Glass Lewis' analyses are thoroughly reviewed and
considered in making a final voting decision, the manager does not consider
recommendations from RiskMetrics, Glass Lewis or any other third party to be
determinative of the manager's ultimate decision. As a matter of policy, the
officers, directors/trustees and employees of the manager and the Proxy Group
will not be influenced by outside sources whose interests conflict with the
interests of the Fund and its shareholders. Efforts are made to resolve all
conflicts in the interests of the manager's clients. Material conflicts of
interest are identified by the Proxy Group based upon analyses of client,
distributor, broker dealer and vendor lists, information periodically gathered
from directors and officers, and information derived from other sources,
including public filings. In situations where a material conflict of interest is
identified, the Proxy Group may defer to the voting recommendation of
RiskMetrics, Glass Lewis or those of another independent third-party provider of
proxy services; or send the proxy directly to the Fund with the manager's
recommendation regarding the vote for approval. If the conflict is not resolved
by the Fund, the Proxy Group may refer the matter, along with the recommended
course of action by the manager, if any, to an interdepartmental Proxy Review
Committee (which may include portfolio managers and/or research analysts
employed by the manager), for evaluation and voting instructions. The Proxy
Review Committee may defer to the voting recommendation of RiskMetrics, Glass
Lewis or those of another independent third-party provider of proxy services; or
send the proxy directly to the Fund. Where the Proxy Group or the Proxy Review
Committee refers a matter to the Fund, it may rely upon the instructions of a
representative of the Fund, such as the board or a committee of the board.
Where a material conflict of interest has been identified, but the items on
which the manager's vote recommendations differ from Glass Lewis, RiskMetrics,
or another independent third-party provider of proxy services relate
specifically to (1) shareholder proposals regarding social or environmental
issues or political contributions, (2) "Other Business" without describing the
matters that might be considered, or (3) items the manager wishes to vote in
opposition to the recommendations of an issuer's management, the Proxy Group may
defer to the vote recommendations of the manager rather than sending the proxy
directly to the Fund for approval.
To avoid certain potential conflicts of interest, the manager will employ echo
voting, if possible, in the following instances: (1) when the Fund invests in an
underlying fund in reliance on any one of Sections 12(d)(1)(E), (F), or (G) of
the 1940 Act, or pursuant to an SEC exemptive order; (2) when the Fund invests
uninvested cash in affiliated money market funds pursuant to an SEC exemptive
order ("cash sweep arrangement"); or (3) when required pursuant to the Fund's
governing documents or applicable law. Echo voting means that the investment
manager will vote the shares in the same proportion as the vote of all of the
other holders of the Fund's shares.
The recommendation of management on any issue is a factor that the manager
considers in determining how proxies should be voted. However, the manager does
not consider recommendations from management to be determinative of the
manager's ultimate decision. As a matter of practice, the votes with respect to
most issues are cast in accordance with the position of the company's
management. Each issue, however, is considered on its own merits, and the
manager will not support the position of the company's management in any
situation where it deems that the ratification of management's position would
adversely affect the investment merits of owning that company's shares.
MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES The manager has adopted general
proxy voting guidelines, which are summarized below. These guidelines are not an
exhaustive list of all the issues that may arise and the manager cannot
anticipate all future situations. In all cases, each proxy will be considered
based on the relevant facts and circumstances.
BOARD OF DIRECTORS. The manager supports an independent board of directors, and
prefers that key committees such as audit, nominating, and compensation
committees be comprised of independent directors. The manager will generally
vote against management efforts to classify a board and will generally support
proposals to declassify the board of directors. The manager may withhold votes
from directors who have attended less than 75% of meetings without a valid
reason. While generally in favor of separating Chairman and CEO positions, the
manager will review this issue as well as proposals to restore or provide for
cumulative voting on a case-by-case basis, taking into consideration factors
such as the company's corporate governance guidelines or provisions and
performance.
RATIFICATION OF AUDITORS OF PORTFOLIO COMPANIES. The manager will closely
scrutinize the role and performance of auditors. On a case-by-case basis, the
manager will examine proposals relating to non-audit relationships and non-audit
fees. The manager will also consider, on a case-by-case basis, proposals to
rotate auditors, and will vote against the ratification of auditors when there
is clear and compelling evidence of accounting irregularities or negligence.
MANAGEMENT AND DIRECTOR COMPENSATION. A company's equity-based compensation plan
should be in alignment with the shareholders' long-term interests. The manager
believes that executive compensation should be directly linked to the
performance of the company. The manager evaluates plans on a case-by-case basis
by considering several factors to determine whether the plan is fair and
reasonable, including the RiskMetrics quantitative model utilized to assess such
plans and/or the Glass Lewis evaluation of the plans. The manager will generally
oppose plans that have the potential to be excessively dilutive, and will almost
always oppose plans that are structured to allow the repricing of underwater
options, or plans that have an automatic share replenishment "evergreen"
feature. The manager will generally support employee stock option plans in which
the purchase price is at least 85% of fair market value, and when potential
dilution is 10% or less.
Severance compensation arrangements will be reviewed on a case-by-case basis,
although the manager will generally oppose "golden parachutes" that are
considered to be excessive. The manager will normally support proposals that
require a percentage of directors' compensation to be in the form of common
stock, as it aligns their interests with those of shareholders.
ANTI-TAKEOVER MECHANISMS AND RELATED ISSUES. The manager generally opposes
anti-takeover measures since they tend to reduce shareholder rights. However, as
with all proxy issues, the manager conducts an independent review of each
anti-takeover proposal. On occasion, the manager may vote with management when
the research analyst has concluded that the proposal is not onerous and would
not harm the Fund or its shareholders' interests. The manager generally supports
proposals that require shareholder rights' plans ("poison pills") to be subject
to a shareholder vote and will closely evaluate such plans on a case-by-case
basis to determine whether or not they warrant support. In addition, the manager
will generally vote against any proposal to issue stock that has unequal or
subordinate voting rights. The manager generally opposes any supermajority
voting requirements as well as the payment of "greenmail." The manager generally
supports "fair price" provisions and confidential voting.
CHANGES TO CAPITAL STRUCTURE. The manager realizes that a company's financing
decisions have a significant impact on its shareholders, particularly when they
involve the issuance of additional shares of common or preferred stock or the
assumption of additional debt. The manager will review, on a case-by-case basis,
proposals by companies to increase authorized shares and the purpose for the
increase. The manager will generally not vote in favor of dual-class capital
structures to increase the number of authorized shares where that class of stock
would have superior voting rights. The manager will generally vote in favor of
the issuance of preferred stock in cases where the company specifies the voting,
dividend, conversion and other rights of such stock and the terms of the
preferred stock issuance are deemed reasonable.
MERGERS AND CORPORATE RESTRUCTURING. Mergers and acquisitions will be subject to
careful review by the research analyst to determine whether they would be
beneficial to shareholders. The manager will analyze various economic and
strategic factors in making the final decision on a merger or acquisition.
Corporate restructuring proposals are also subject to a thorough examination on
a case-by-case basis.
SOCIAL AND CORPORATE POLICY ISSUES. The manager will generally give management
discretion with regard to social, environmental and ethical issues, although the
manager may vote in favor of those that are believed to have significant
economic benefits or implications for the Fund and its shareholders.
GLOBAL CORPORATE GOVERNANCE. Many of the tenets discussed above are applied to
the manager's proxy voting decisions for international investments. However, the
manager must be flexible in these instances and must be mindful of the varied
market practices of each region.
The manager will attempt to process every proxy it receives for all domestic and
foreign issuers. However, there may be situations in which the manager cannot
process proxies, for example, where a meeting notice was received too late, or
sell orders preclude the ability to vote. If a security is on loan, the manager
may determine that it is not in the best interests of the Fund to recall the
security for voting purposes. Also, the manager may abstain from voting under
certain circumstances or vote against items such as "Other Business" when the
manager is not given adequate information from the company.
Shareholders may view the complete Policies online at franklintempleton.com.
Alternatively, shareholders may request copies of the Policies free of charge by
calling the Proxy Group collect at (954)527-7678 or by sending a written request
to: Franklin Templeton Companies, LLC, 500 East Broward Boulevard, Suite 1500,
Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Fund's proxy
voting records are available online at franklintempleton.com and posted on the
SEC website at www.sec.gov. The proxy voting records are updated each year by
August 31 to reflect the most recent 12-month period ended June 30.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. N/A
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant's Board of Trustees that would require disclosure
herein.
ITEM 11. CONTROLS AND PROCEDURES.
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.
(B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TEMPLETON EMERGING MARKETS FUND
By /s/LAURA F. FERGERSON
--------------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date: April 27, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/LAURA F. FERGERSON
--------------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date: April 27, 2010
By /s/MARK H. OTANI
--------------------------------
Mark H. Otani
Chief Financial Officer and
Chief Accounting Officer
Date: April 27, 2010