Templeton Emerging Markets Income Fund (“TEI” or the “Fund”) Announces Notification of Sources of Distributions

Rhea-AI Summary

Templeton Emerging Markets Income Fund (NYSE: TEI) has announced its distribution sources for September 2024 and the fiscal year 2024 to date. The Fund's September monthly distribution of $0.0475 per share is estimated to be 100% from net investment income. For the fiscal year-to-date, the cumulative distribution of $0.3800 per share is estimated to be 93% from net investment income, 1% from net realized short-term capital gains, and 6% from return of capital.

The Fund's performance metrics as of August 31, 2024, include an average annual total return of -0.95% over 5 years, an annualized distribution rate of 9.44%, and a cumulative total return of 9.09% for the current fiscal period. The Fund operates under a managed distribution plan, aiming to provide consistent monthly distributions of $0.0475 per share and narrow the discount between market price and NAV.

Positive

• Monthly distribution of $0.0475 per share maintained
• 93% of year-to-date distributions sourced from net investment income
• Annualized distribution rate of 9.44% based on NAV
• Cumulative total return of 9.09% for the current fiscal period

Negative

• Average annual total return of -0.95% over 5-year period
• 6% of year-to-date distributions classified as return of capital
• Fund has distributed more than its income and net realized capital gains

Insights

Financial Analyst

This distribution announcement for Templeton Emerging Markets Income Fund (TEI) provides important information for investors. The fund is maintaining its $0.0475 per share monthly distribution, with 100% sourced from net investment income for September. Year-to-date, 93% came from net investment income, 1% from short-term capital gains and 6% from return of capital.

The fund's performance metrics are mixed. While it shows a 9.09% cumulative total return for the current fiscal period, its 5-year average annual total return is negative at -0.95%. The annualized distribution rate of 9.44% is attractive, but investors should note that it exceeds the fund's total return, which may not be sustainable long-term.

The managed distribution plan aims to narrow the discount between market price and NAV, but investors should be cautious as the high distribution rate may include return of capital, potentially eroding the fund's asset base over time.

Investment Strategist

TEI's distribution strategy reveals important insights for emerging market debt investors. The fund's ability to source 93% of its year-to-date distributions from net investment income is positive, indicating it's generating substantial yields from its emerging market debt holdings. However, the inclusion of return of capital (6%) in distributions suggests challenges in fully covering payouts from income and gains.

The negative 5-year average annual total return of -0.95% is concerning, reflecting difficulties in generating consistent returns in the volatile emerging markets fixed income space. This underperformance might explain the fund's strategy to maintain high distributions, possibly to attract investors despite weak NAV performance.

Investors should closely monitor the fund's NAV trend and distribution coverage. If NAV erosion continues while maintaining high distributions, it could lead to a shrinking asset base and potential distribution cuts in the future.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Templeton Emerging Markets Income Fund [NYSE: TEI]:

Notification of Sources of Distributions Pursuant to Section 19(a) of the Investment Company Act of 1940

The Fund’s estimated sources of the distribution to be paid on September 30, 2024, and for the fiscal year 2024 year-to-date are as follows:

Estimated Allocations for September Monthly Distribution as of August 31, 2024:

Distribution Per Share	Net Investment Income	Net Realized Short-Term Capital Gains	Net Realized Long-Term Capital Gains	Return of Capital
$0.0475	$0.0475 (100%)	$0.00 (0%)	$0.00 (0%)	$0.00 (0%)

Cumulative Estimated Allocations fiscal year-to-date as of August 31, 2024, for the fiscal year ending December 31, 2024:

Distribution Per Share	Net Investment Income	Net Realized Short-Term Capital Gains	Net Realized Long-Term Capital Gains	Return of Capital
$0.3800	$0.3521 (93%)	$0.0036 (1%)	$0.00 (0%)	$0.0243 (6%)

Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Plan. TEI estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of the TEI distribution to shareholders may be a return of capital. A return of capital may occur, for example, when some or all of the money that a shareholder invested in a Fund is paid back to them. A return of capital distribution does not necessarily reflect TEI’s investment performance and should not be confused with ‘yield’ or ‘income’. The amounts and sources of distributions reported herein are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will describe how to report the Fund’s distributions for federal income tax purposes.

Average Annual Total Return (in relation to the change in net asset value (NAV) for the 5-year period ended on 8/31/2024)1	Annualized Distribution Rate (as a percentage of NAV for the current fiscal period through 8/31/2024)2	Cumulative Total Return (in relation to the change in NAV for the fiscal period through 8/31/2024)3	Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 8/31/2024)4
-0.95%	9.44%	9.09%	6.29%

Fund Performance and Distribution Rate Information:

1. Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five-year period ended through August 31, 2024. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year, assuming reinvestment of distributions paid.
2. The Annualized Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV through August 31, 2024.
3. Cumulative Total Return is the percentage change in the Fund’s NAV from December 31, 2023 through August 31, 2024, assuming reinvestment of distributions paid.
4. The Cumulative Fiscal Year-To-Date Distribution Rate is the dollar value of distributions for the fiscal period December 31, 2023 through August 31, 2024, as a percentage of the Fund’s NAV as of August 31, 2024.

The Fund’s Board of Trustees (the “Board”) has authorized a managed distribution plan (the “Plan”) pursuant to which the Fund makes monthly distributions to shareholders at the fixed rate of $0.0475 per share. The Plan is intended to provide shareholders with consistent distributions each month and is intended to narrow the discount between the market price and the net asset value (“NAV”) of the Fund’s common shares, but there can be no assurance that the Plan will be successful in doing so. The Fund is managed with a goal of generating as much of the distribution as possible from net ordinary income and short-term capital gains, that is consistent with the Fund’s investment strategy and risk profile. To the extent that sufficient distributable income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution rate. A return of capital may occur, for example, when some or all of the money that was invested in the Fund is paid back to shareholders. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. Even though the Fund may realize current year capital gains, such gains may be offset, in whole or in part, by the Fund’s capital loss carryovers from prior years.

The Board may amend the terms of the Plan or terminate the Plan at any time without prior notice to the Fund’s shareholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Fund’s common shares. The Plan will be subject to the periodic review by the Board, including a yearly review of the fixed rate to determine if an adjustment should be made.

For further information on Templeton Emerging Markets Income Fund,
please visit our web site at: www.franklintempleton.com

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of August 31, 2024. For more information, please visit franklintempleton.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240927855390/en/

For more information, please contact Franklin Templeton at 1-800-342-5236

Source: Franklin Templeton

FAQ

What is the monthly distribution amount for Templeton Emerging Markets Income Fund (TEI)?

The monthly distribution amount for Templeton Emerging Markets Income Fund (TEI) is $0.0475 per share.

What is the source of TEI's September 2024 distribution?

The September 2024 distribution for TEI is estimated to be 100% from net investment income.

What is TEI's annualized distribution rate as of August 31, 2024?

TEI's annualized distribution rate is 9.44% as of August 31, 2024, based on the Fund's NAV.

Has TEI's managed distribution plan affected its performance?

While the plan aims to provide consistent distributions, TEI's 5-year average annual total return is -0.95%, indicating negative long-term performance despite the distribution strategy.