| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 50.55 | 325 |
| Intrinsic value (DCF) | 3.81 | -68 |
| Graham-Dodd Method | 15.70 | 32 |
| Graham Formula | n/a |
Templeton Dragon Fund, Inc. (NYSE: TDF) is a closed-end equity mutual fund managed by Templeton Asset Management Ltd., a subsidiary of Franklin Resources, Inc. Specializing in Chinese public equities, TDF focuses on value stocks across diversified sectors, employing fundamental analysis to assess growth prospects, competitive positioning, and financial health. Launched in 1994 and domiciled in the U.S., the fund targets undervalued companies with strong export potential, technological innovation, and sustainable profit margins. With a market cap of approximately $247 million, TDF offers investors exposure to China's dynamic economy, though it carries inherent risks tied to geopolitical and regulatory uncertainties. Its active management strategy and emphasis on value investing differentiate it in the asset management sector, appealing to investors seeking long-term growth in emerging markets.
Templeton Dragon Fund (TDF) presents a niche opportunity for investors targeting Chinese equities through a value-oriented, actively managed approach. The fund’s focus on undervalued stocks with strong fundamentals may appeal to those bullish on China’s long-term growth, particularly in sectors like technology and manufacturing. However, risks include China’s regulatory volatility, U.S.-China tensions, and economic slowdowns. TDF’s low beta (0.47) suggests lower volatility relative to broader markets, but its concentrated geographic exposure limits diversification. The fund’s $0.2155 dividend per share and $27 million net income (FY 2024) indicate stable returns, though its reliance on China’s market performance remains a critical factor. Investors should weigh these dynamics against broader emerging market alternatives.
TDF’s competitive edge lies in its specialized focus on Chinese value stocks and active management by Templeton, leveraging Franklin Resources’ global expertise. Unlike passive China ETFs (e.g., MCHI), TDF’s fundamental analysis targets mispriced equities, potentially offering alpha in inefficient markets. However, its closed-end structure may trade at premiums/discounts to NAV, introducing liquidity risks absent in open-end funds. Competitors like Matthews China Funds (MCHFX) offer broader active strategies, while iShares MSCI China ETF (MCHI) provides lower-cost passive exposure. TDF’s small size ($247M AUM) limits scalability but allows agility in stock selection. Its zero debt and $2.2M cash position reflect conservative leverage, but fee structures and China-specific risks (e.g., regulatory crackdowns) may deter some investors. Performance hinges on Templeton’s ability to navigate China’s opaque regulatory environment and identify undervalued firms ahead of peers.