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

Rhea-AI Summary

Templeton Emerging Markets Income Fund (TEI) has announced a monthly distribution from net investment income of $0.0475 per share, payable on February 29, 2024, to shareholders of record on February 20, 2024. The Fund's Board of Trustees has authorized a managed distribution plan to provide consistent distributions each month and narrow the discount between the market price and the net asset value of the Fund's common shares. However, there is no assurance that the Plan will be successful. The Fund may distribute long-term capital gains and/or return of capital if sufficient distributable income is not available. The Board may amend or terminate the Plan at any time, which could have an adverse effect on the market price of the Fund's common shares.

Positive

• None.

Negative

• The Plan may not be successful in narrowing the discount between the market price and the net asset value of the Fund's common shares.
• The Fund may distribute long-term capital gains and/or return of capital if sufficient distributable income is not available, potentially affecting shareholders.
• The amendment or termination of the Plan by the Board could have an adverse effect on the market price of the Fund's common shares.

Financial Analyst

The announcement by Templeton Emerging Markets Income Fund [NYSE: TEI] regarding its monthly distribution from net investment income is a strategic financial maneuver designed to provide a steady stream of income to its shareholders. The fixed distribution rate of $0.0475 per share reflects a commitment to predictable returns, which can be particularly appealing to income-focused investors.

However, the reliance on both net ordinary income and short-term capital gains to generate these distributions can be volatile, depending on market conditions. This strategy aligns with the Fund's stated investment strategy and risk profile, but it is important to note that the consistency of these distributions may be challenged during economic downturns or periods of low market performance.

The possibility of distributing long-term capital gains and/or return of capital is noteworthy. While such distributions can help maintain the managed distribution rate, they also indicate that the Fund may not always generate enough income to cover the distributions. A return of capital, while providing cash to shareholders, is not derived from the Fund's earnings and could potentially erode the investment's principal over time.

It is also crucial to understand that the Fund's Board retains the authority to amend or terminate the Plan, which could introduce uncertainty and potentially impact the market price of the Fund's shares. Investors should monitor the Board's periodic reviews, especially the yearly review of the fixed rate, as any adjustments could signal changes in the Fund's financial health or market outlook.

Market Research Analyst

Templeton Emerging Markets Income Fund's managed distribution plan aims to narrow the gap between market price and the net asset value (NAV) of its shares. This strategy can make the Fund's shares more attractive by reducing the discount at which they might trade relative to the NAV, potentially increasing investor demand and liquidity.

However, the effectiveness of such a plan in narrowing this discount is not guaranteed. Market sentiment, broader economic trends and the performance of the emerging markets in which the Fund invests will all play significant roles in determining the success of this strategy.

Investors should also be aware that the distribution of long-term capital gains and return of capital, if used frequently to maintain the distribution rate, could signal that the Fund is struggling to generate sufficient income through its normal operations. This could be a red flag for investors who are seeking sustainable income from their investments, as it may indicate a potential depletion of the Fund's assets over time.

Economist

The economic implications of Templeton Emerging Markets Income Fund's distribution plan must be evaluated within the context of the current economic climate and the nature of emerging markets. Emerging markets can be more volatile and less predictable than developed markets, which adds a layer of complexity to the Fund's income-generating abilities.

The approach to pay consistent distributions could be seen as a stabilizing factor for investors amidst the inherent volatility of emerging markets. However, it also raises questions about the sustainability of such distributions if the underlying investments do not perform as expected.

Furthermore, the Fund's ability to use capital loss carryovers to offset current year capital gains might provide some tax advantages. However, this also suggests that the Fund has experienced losses in the past, which could impact investor confidence in the potential for future gains. The economic context, including interest rate trends, inflation and global market dynamics, will significantly influence the Fund's performance and its ability to maintain the managed distribution rate.

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 February 29, 2024, to shareholders of record on February 20, 2024 (Ex-Dividend Date: February 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 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and approximately $1.5 trillion in assets under management as of December 31, 2023. For more information, please visit franklintempleton.com.

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Franklin Templeton

1-800-342-5236

Source: Franklin Templeton

What is the monthly distribution from net investment income announced by Templeton Emerging Markets Income Fund (TEI)?

The monthly distribution from net investment income announced by Templeton Emerging Markets Income Fund (TEI) is $0.0475 per share.

When is the monthly distribution payable to shareholders of Templeton Emerging Markets Income Fund (TEI)?

The monthly distribution is payable on February 29, 2024, to shareholders of record on February 20, 2024.

What is the managed distribution plan authorized by the Board of Trustees of Templeton Emerging Markets Income Fund (TEI)?

The managed distribution plan is intended to provide consistent distributions each month and narrow the discount between the market price and the net asset value of the Fund's common shares.

What may the Templeton Emerging Markets Income Fund (TEI) distribute if sufficient distributable income is not available on a monthly basis?

The Fund may distribute long-term capital gains and/or return of capital if sufficient distributable income is not available.

Can the Board of Trustees of Templeton Emerging Markets Income Fund (TEI) amend or terminate the managed distribution plan?

Yes, the Board may amend or terminate the plan at any time without prior notice to the Fund's shareholders.

What could be the adverse effect of the amendment or termination of the managed distribution plan by the Board of Trustees of Templeton Emerging Markets Income Fund (TEI)?

The amendment or termination of the Plan could have an adverse effect on the market price of the Fund's common shares.