Franklin Templeton Closed-End Funds Announce Share Repurchases for the Fourth Quarter of 2023

Rhea-AI Summary

During the fourth quarter of 2023, several funds announced their share repurchase activity, including Western Asset Emerging Markets Debt Fund Inc. (EMD) with 949,123 shares repurchased. Share repurchases aim to enhance shareholder value by buying shares at a discount to the fund's net asset value. The difference between the purchase price and NAV results in incremental accretion to the Fund’s NAV for all shareholders.

Insights

Financial Analyst

Share repurchase programs are a strategic tool used by funds to manage their share price and provide value to existing shareholders. The activity outlined indicates a proactive approach to capital allocation, where the funds actively buy back shares when they perceive them to be undervalued. This can signal to the market that the fund's management believes the current share price does not reflect the underlying value of the fund's assets.

From a financial perspective, the cancellation of repurchased shares typically results in a higher net asset value (NAV) per remaining share, as the fund's assets are now spread across fewer shares. This can be attractive to investors, as it often leads to an appreciation in share price. However, it's important to scrutinize the opportunity cost of such repurchases. The funds could alternatively invest the capital into new opportunities that might offer higher returns.

Market Research Analyst

Examining the repurchase activity within the context of the emerging markets sector can offer insights into broader market sentiment. Emerging markets can be volatile and a fund's decision to repurchase its shares might reflect a view that market conditions have led to an undue discount on the fund's shares. It's essential to consider the macroeconomic factors affecting emerging markets, such as currency fluctuations, political stability and commodity prices, as they can significantly impact the fund's NAV and the perceived attractiveness of the repurchase program.

Investors should also be aware of the liquidity implications of share repurchases. While they can provide liquidity to shareholders wishing to sell, extensive repurchase activity could also reduce the number of shares available for trading, potentially impacting the fund's liquidity and marketability.

Economist

Share repurchase programs in the context of emerging markets funds may also reflect broader economic trends. For instance, if emerging markets are experiencing growth, funds may seek to repurchase shares to consolidate gains and increase shareholder value ahead of anticipated market corrections. Conversely, if the repurchases occur during market downturns, it could indicate a strategic move to buy back undervalued shares, betting on a future recovery.

Investors should consider the timing and scale of these repurchases in relation to economic cycles and potential shifts in global capital flows towards or away from emerging markets. Such repurchases could affect the funds' performance and their ability to capitalize on future market movements.

NEW YORK--(BUSINESS WIRE)-- The following Funds announced today their share repurchase activity during the fourth quarter of 2023.

Ticker	Fund Name	Share Repurchases (10/1/23 - 12/31/23)	Repurchases Since Inception of Each Fund’s Repurchase Program
EMD	Western Asset Emerging Markets Debt Fund Inc.	949,123	2,302,447
EMF	Templeton Emerging Markets Fund	129,326	2,585,293
TEI	Templeton Emerging Markets Income Fund	116,213	1,380,500

Share Repurchases seek to enhance shareholder value by purchasing the Fund’s shares when trading at a discount to the Fund’s net asset value (“NAV”) per share. All repurchased shares are canceled and the difference between the purchase price and NAV results in incremental accretion to the Fund’s NAV for all shareholders.

Each Fund’s Board of Directors/Trustees has authorized each Fund to repurchase shares when they are trading at a discount to NAV and management reasonably believes the share repurchases will enhance shareholder value. The Funds are under no obligation to purchase shares at any specific discount levels or in any specific amounts. Each Fund's repurchase activity will also be disclosed in its shareholder report for the relevant fiscal period.

About Franklin Templeton

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton.

For more information about the Funds, please call 1-888-777-0102 or consult the Funds’ website at www.franklintempleton.com/investments/options/closed-end-funds. Hard copies of the Funds’ complete audited financial statements are available free of charge upon request.

Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Funds.

The Funds’ shares are traded on the New York Stock Exchange. Similar to stocks, Fund share prices will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value, and can increase an investor’s risk of loss. All investments are subject to risk, including the risk of loss.

This press release contains "forward-looking statements" as defined under the U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," and similar expressions identify forward looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual future results to differ significantly from each Fund’s present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political

conditions; regulatory and legal changes; leverage risk; valuation risk; interest rate risk; tax risk; the continuation of investment advisory, administration and other service arrangements; and other risks discussed in the fund’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund’s investment objectives will be attained.

INVESTMENT PRODUCTS: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

Category: Corporate Action

Source: Franklin Resources, Inc.

Source: Legg Mason Closed End Funds

Media Contact: Fund Investor Services-1-888-777-0102

View source version on businesswire.com: https://www.businesswire.com/news/home/20240117572535/en/

Investor: Fund Investor Services 1-888-777-0102

Source: Franklin Resources, Inc. and Legg Mason Closed End Funds

FAQ

How many shares did Western Asset Emerging Markets Debt Fund Inc. (EMD) repurchase in the fourth quarter of 2023?

Western Asset Emerging Markets Debt Fund Inc. (EMD) repurchased 949,123 shares in the fourth quarter of 2023.

What is the purpose of share repurchases for the funds mentioned in the PR?

Share repurchases aim to enhance shareholder value by purchasing the Fund’s shares when trading at a discount to the Fund’s net asset value.

What happens to the repurchased shares?

All repurchased shares are canceled and the difference between the purchase price and NAV results in incremental accretion to the Fund’s NAV for all shareholders.

Are the funds obligated to purchase shares at specific discount levels?

The Funds are under no obligation to purchase shares at any specific discount levels or in any specific amounts.

Will each Fund's repurchase activity be disclosed in its shareholder report?

Yes, each Fund's repurchase activity will be disclosed in its shareholder report for the relevant fiscal period.