FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-04985
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TEMPLETON EMERGING MARKETS FUND
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(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: 05/31/08
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ITEM 1. SCHEDULE OF INVESTMENTS.
Templeton Emerging Markets Fund
QUARTERLY STATEMENT OF INVESTMENTS
MAY 31, 2008
CONTENTS
Statement of Investments................................................... 3
Notes to Statement of Investments.......................................... 6
(FRANKLIN TEMPLETON INVESTMENTS LOGO)
FRANKLIN TEMPLETON INVESTMENTS
Franklin - TEMPLETON - Mutual Series
Quarterly Statement of Investments | 1
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Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, MAY 31, 2008 (UNAUDITED)
INDUSTRY SHARES VALUE
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LONG TERM INVESTMENTS 99.4%
COMMON STOCKS 77.4%
AUSTRIA 1.7%
OMV AG .................................... Oil, Gas & Consumable Fuels 89,020 $ 7,326,688
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BRAZIL 1.6%
Souza Cruz SA ............................. Tobacco 229,973 7,087,947
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CHINA 14.4%
Aluminum Corp. of China Ltd., H ........... Metals & Mining 9,792,000 16,988,760
China Petroleum and Chemical Corp., H ..... Oil, Gas & Consumable Fuels 7,874,000 7,930,299
Chiwan Wharf Holdings Ltd., B ............. Transportation Infrastructure 1,073,000 1,759,873
CNOOC Ltd. ................................ Oil, Gas & Consumable Fuels 6,512,000 11,348,146
Denway Motors Ltd. ........................ Automobiles 17,270,730 8,077,467
People's Food Holdings Ltd. ............... Food Products 1,093,000 915,518
PetroChina Co. Ltd., H .................... Oil, Gas & Consumable Fuels 11,688,000 16,803,690
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63,823,753
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HONG KONG 3.4%
Dairy Farm International Holdings Ltd. .... Food & Staples Retailing 1,658,100 9,219,036
Tack Fat Group International Ltd. ......... Textiles, Apparel & Luxury Goods 22,165,000 1,902,892
Victory City International Holdings Ltd. .. Textiles, Apparel & Luxury Goods 14,860,000 4,150,945
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15,272,873
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HUNGARY 1.9%
(a) MOL Hungarian Oil and Gas Nyrt ........... Oil, Gas & Consumable Fuels 56,975 8,587,141
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INDIA 7.0%
(a) Hindalco Industries Ltd. .................. Metals & Mining 869,800 3,960,107
National Aluminium Co. Ltd. ............... Metals & Mining 613,230 7,765,738
Oil & Natural Gas Corp. Ltd. .............. Oil, Gas & Consumable Fuels 250,395 5,133,216
Peninsula Land Ltd. ....................... Real Estate Management & Development 305,000 584,535
Sesa Goa Ltd. ............................. Metals & Mining 135,814 13,808,347
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31,251,943
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INDONESIA 1.7%
PT Astra International Tbk ................ Automobiles 1,742,000 3,927,214
PT Bank Central Asia Tbk .................. Commercial Banks 12,849,000 3,827,802
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7,755,016
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MEXICO 2.9%
Kimberly Clark de Mexico SAB de CV, A ..... Household Products 1,572,800 7,392,088
Telefonos de Mexico SAB de CV, L, ADR ..... Diversified Telecommunication Services 133,674 5,510,042
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12,902,130
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PAKISTAN 1.2%
Faysal Bank Ltd. .......................... Commercial Banks 6,029,500 3,085,071
MCB Bank Ltd. ............................. Commercial Banks 589,450 2,434,176
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5,519,247
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POLAND 4.2%
Grupa Lotos SA ............................ Oil, Gas & Consumable Fuels 306,000 4,725,493
(a) Polnord SA ................................ Construction & Engineering 158,000 6,455,076
(a) Polski Koncern Naftowy Orlen SA ........... Oil, Gas & Consumable Fuels 404,750 7,484,137
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18,664,706
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Quarterly Statement of Investments | 3
Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, MAY 31, 2008 (UNAUDITED) (CONTINUED)
INDUSTRY SHARES VALUE
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LONG TERM INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED)
RUSSIA 11.5%
Gazprom, ADR .............................. Oil, Gas & Consumable Fuels 231,422 $ 13,989,460
LUKOIL, ADR ............................... Oil, Gas & Consumable Fuels 101,006 11,300,046
LUKOIL, ADR (London Exchange) ............. Oil, Gas & Consumable Fuels 36,510 4,043,483
Mining and Metallurgical Co.
Norilsk Nickel ......................... Metals & Mining 44,679 13,202,644
Mobile TeleSystems, ADR ................... Wireless Telecommunication Services 77,300 6,771,480
OAO TMK, GDR .............................. Energy Equipment & Services 41,000 1,650,250
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50,957,363
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SOUTH KOREA 7.6%
Avista Inc. ............................... Textiles, Apparel & Luxury Goods 186,910 1,817,749
Hyundai Development Co. ................... Construction & Engineering 104,630 6,400,415
Kangwon Land Inc. ......................... Hotels, Restaurants & Leisure 330,008 7,830,970
Neopharm Co. Ltd. ......................... Personal Products 174,065 1,557,402
SK Energy Co. Ltd. ........................ Oil, Gas & Consumable Fuels 103,411 12,872,947
SK Holdings Co. Ltd. ...................... Industrial Conglomerates 21,990 3,464,508
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33,943,991
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SWEDEN 1.5%
Oriflame Cosmetics SA, SDR ................ Personal Products 91,120 6,466,610
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TAIWAN 2.5%
MediaTek Inc. ............................. Semiconductors & Semiconductor Equipment 210,094 2,625,096
Taiwan Semiconductor Manufacturing Co.
Ltd. ................................... Semiconductors & Semiconductor Equipment 3,878,007 8,364,891
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10,989,987
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THAILAND 7.5%
Amata Corp. Public Co. Ltd., fgn .......... Real Estate Management & Development 4,557,300 2,384,589
Kasikornbank Public Co. Ltd., fgn ......... Commercial Banks 2,251,200 5,855,012
Kiatnakin Bank Public Co. Ltd., fgn. ...... Consumer Finance 7,061,600 6,194,481
Land and Houses Public Co. Ltd., fgn. ..... Household Durables 6,872,332 1,861,417
PTT Exploration and Production Public Co.
Ltd., fgn .............................. Oil, Gas & Consumable Fuels 1,226,600 7,059,949
PTT Public Co. Ltd., fgn. ................. Oil, Gas & Consumable Fuels 578,000 5,977,562
Siam Cement Public Co. Ltd., fgn. ......... Construction Materials 608,620 3,858,961
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33,191,971
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TURKEY 6.8%
Akbank TAS Commercial Banks 2,723,231 12,065,513
Tupras-Turkiye Petrol Rafineleri AS ........ Oil, Gas & Consumable Fuels 427,186 10,690,165
Turkcell Iletisim Hizmetleri AS ............ Wireless Telecommunication Services 957,217 7,539,615
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30,295,293
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TOTAL COMMON STOCKS
(COST $205,242,391) .................... 344,036,659
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4 | Quarterly Statement of Investments
Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS, MAY 31, 2008 (UNAUDITED) (CONTINUED)
INDUSTRY SHARES VALUE
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LONG TERM INVESTMENTS (CONTINUED)
PREFERRED STOCKS 22.0%
BRAZIL 22.0%
Banco Bradesco SA, ADR, pfd. .............. Commercial Banks 624,222 $ 14,987,570
Companhia Vale do Rio Doce, ADR, pfd., A .. Metals & Mining 966,300 31,820,259
Petroleo Brasileiro SA, ADR, pfd. ......... Oil, Gas & Consumable Fuels 670,320 40,514,141
Unibanco - Uniao de Bancos Brasileiros
SA, GDR, pfd. .......................... Commercial Banks 65,300 10,243,611
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TOTAL PREFERRED STOCKS
(COST $22,513,066) ..................... 97,565,581
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TOTAL LONG TERM INVESTMENTS
(COST $227,755,457) .................... 441,602,240
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SHORT TERM INVESTMENT
(COST $2,376,811) 0.5%
MONEY MARKET FUND 0.5%
UNITED STATES 0.5%
(b) Franklin Institutional Fiduciary Trust
Money
Market Portfolio, 2.17% ................ 2,376,811 2,376,811
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TOTAL INVESTMENTS
(COST $230,132,268) 99.9% .............. 443,979,051
OTHER ASSETS, LESS LIABILITIES 0.1% ....... 630,534
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NET ASSETS 100.0% ......................... $444,609,585
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SELECTED PORTFOLIO ABBREVIATIONS
ADR - American Depository Receipt
GDR - Global Depository Receipt
SDR - Swedish Depository Receipt
(a) Non-income producing for the twelve months ended May 31, 2008.
(b) The Franklin Institutional Fiduciary Trust Money Market Portfolio is
managed by an affiliate of the Fund's investment manager. The rate shown is
the annualized seven-day yield at period end.
Quarterly Statement of Investments | See Notes to Statement of Investments. | 5
Templeton Emerging Markets Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED)
1. ORGANIZATION
Templeton Emerging Markets Fund (Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, closed-end investment
company.
2. SECURITY VALUATION
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. Investments in open-end mutual funds are valued at the closing net asset
value.
Foreign 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 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 foreign
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, 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.
6 | Quarterly Statement of Investments
Templeton Emerging Markets Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
3. INCOME TAXES
At May 31, 2008, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments ............................. $230,364,962
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Unrealized appreciation ......................... $222,354,489
Unrealized depreciation ......................... (8,740,400)
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Net unrealized appreciation (depreciation) ...... $213,614,089
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4. NEW ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 157, "Fair Value Measurement" (SFAS 157), which defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. SFAS 157 is effective for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. The Fund
believes the adoption of SFAS 157 will have no material impact on its financial
statements.
In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The Fund is currently
evaluating the impact, if any, of applying the various provisions of SFAS 161.
For information on the Fund's policy regarding other significant accounting
policies, please refer to the Fund's most recent semiannual or annual
shareholder report.
Quarterly Statement of Investments | 7
ITEM 2. 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 Quarterly Schedule of Portfolio
Holdings on Form N-Q, 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 Quarterly Schedule of Portfolio Holdings
on Form N-Q.
ITEM 3. EXHIBITS.
(a) Certification pursuant to Section 30a-2 under the Investment Company Act of
1940 of Galen G. Vetter, Chief Executive Officer - Finance and Administration,
and Laura F. Fergerson, 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/GALEN G. VETTER
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Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date July 25, 2008
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/GALEN G. VETTER
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Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date July 25, 2008
By /s/LAURA F. FERFERSON
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Laura F. Fergerson
Chief Financial Officer and
Chief Accounting Officer
Date July 25, 2008