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 March 31, 2025, to shareholders of record on March 17, 2025. The distribution is part of a managed distribution plan approved by the Fund's Board of Trustees.

The Plan aims to provide consistent monthly distributions and reduce the discount between market price and net asset value (NAV) of the Fund's shares. Distributions will primarily come from net ordinary income and short-term capital gains, with long-term capital gains and/or return of capital used when necessary to maintain the fixed rate.

The Fund is managed by Franklin Templeton, a global investment management organization with $1.58 trillion in assets under management as of January 31, 2025. The company employs over 1,500 investment professionals across major financial markets worldwide.

Positive

• Fixed monthly distribution provides stable income stream to shareholders
• Plan aims to reduce NAV discount
• Backed by Franklin Templeton's substantial $1.58T AUM

Negative

• Distributions may include return of capital, not just investment income
• No guarantee the plan will succeed in reducing NAV discount
• Capital loss carryovers may offset current year gains

Insights

Financial Analyst

TEI's announcement confirms continuation of its fixed monthly distribution of $0.0475 per share, maintaining the Fund's managed distribution plan. For income-seeking investors, this represents an annualized distribution rate of approximately 10.5% based on the current share price of $5.44.

What's critical to understand is the composition of these distributions. The Fund explicitly notes they may not be fully covered by net investment income or short-term gains. When sufficient income isn't available, TEI will distribute long-term capital gains or return of capital to maintain the fixed rate. This means shareholders might be receiving a portion of their own investment back rather than true investment income.

The Fund mentions capital loss carryovers potentially offsetting current year gains, suggesting tax efficiency challenges. The Board's ability to amend or terminate the plan without prior notice introduces uncertainty for investors relying on this income stream.

For TEI, with its modest $257M market cap, maintaining this distribution level appears aimed at narrowing the fund's NAV discount rather than reflecting underlying portfolio performance. Emerging markets fixed income continues to face challenges from global interest rate environments and currency fluctuations, making sustainable income generation difficult.

Investors should approach this distribution with awareness that high yield often comes with corresponding risk factors in the underlying emerging markets debt portfolio.

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 March 31, 2025, to shareholders of record on March 17, 2025 (Ex-Dividend Date: March 17, 2025).

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 $1.58 trillion in assets under management as of January 31, 2025. For more information, please visit franklintempleton.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250307489359/en/

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

Source: Franklin Templeton

FAQ

What is the monthly distribution amount announced by TEI for March 2025?

TEI announced a monthly distribution of $0.0475 per share, payable on March 31, 2025, to shareholders of record on March 17, 2025.

What are the main objectives of TEI's managed distribution plan?

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

How does TEI fund its monthly distributions under the current plan?

TEI primarily funds distributions through net ordinary income and short-term capital gains, using long-term capital gains and/or return of capital when necessary to maintain the fixed rate.

What is Franklin Templeton's total assets under management as of January 2025?

Franklin Templeton reported $1.58 trillion in assets under management as of January 31, 2025.