Templeton Emerging Markets Income Fund (“TEI” or the “Fund”) Announces Distribution

Rhea-AI Summary

Templeton Emerging Markets Income Fund (TEI) has declared a monthly distribution of $0.0475 per share, payable on December 31, 2024, to shareholders of record on December 16, 2024. The distribution is part of a managed distribution plan approved by the Fund's Board of Trustees, aiming to provide consistent monthly payments and narrow the discount between market price and NAV.

The Fund prioritizes generating distributions from net ordinary income and short-term capital gains, aligned with its investment strategy. If insufficient income is available, the Fund may distribute long-term capital gains or return capital to maintain its rate. The plan may be amended or terminated by the Board, potentially affecting the Fund's common shares market price.

Positive

• Fixed monthly distribution rate of $0.0475 per share provides steady income stream
• Managed distribution plan aims to reduce NAV discount

Negative

• Distributions may include return of capital, which could reduce investment principal
• Current distributions might be supported by capital loss carryovers, not actual gains
• Plan termination risk could adversely affect share price

Insights

Financial Analyst

The announced monthly distribution of $0.0475 per share under TEI's managed distribution plan is a routine announcement that merits attention for income-focused investors. The fixed-rate distribution strategy aims to provide predictable income while potentially narrowing the fund's market price to NAV discount. However, investors should note that distributions may include return of capital, which could indicate the fund isn't generating sufficient income to cover payments. This is particularly relevant given the fund's focus on emerging markets fixed income, where yields can be volatile. The distribution represents an annualized yield of approximately 22.8% based on the current share price, which is notably high and warrants careful analysis of the distribution's composition in future 1099-DIV forms.

Market Research Analyst

Franklin Templeton's considerable scale, with $1.6 trillion in assets under management and global presence across 150 countries, provides TEI with significant research and investment capabilities in emerging markets. The fund's managed distribution plan reflects a strategic approach to address the common closed-end fund challenge of market price discounts to NAV. However, the effectiveness of this strategy should be monitored, as persistent return of capital distributions could potentially erode the fund's asset base over time. The fund's ability to navigate emerging market debt markets while maintaining its distribution policy will be important for long-term sustainability.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Templeton Emerging Markets Income Fund [NYSE: TEI] today announced a monthly distribution from net investment income of $0.0475 per share, payable on December 31, 2024, to shareholders of record on December 16, 2024 (Ex-Dividend Date: December 16, 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.

Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Plan. 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.

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 October 31, 2024. For more information, please visit franklintempleton.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241206002035/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)?

TEI announced a monthly distribution of $0.0475 per share, payable on December 31, 2024.

When is the ex-dividend date for TEI's December 2024 distribution?

The ex-dividend date for TEI's December distribution is December 16, 2024.

What is the purpose of TEI's managed distribution plan?

The plan aims to provide consistent monthly distributions to shareholders and narrow the discount between the market price and NAV of the Fund's common shares.

How does TEI generate its monthly distributions?

TEI aims to generate distributions primarily from net ordinary income and short-term capital gains, but may also use long-term capital gains or return of capital if necessary.