By Laura Urmoneit

(July 28) – Scores of Templeton Management Ltd. portfolio managers and supporters stuck to their value-investment guns despite lagging fund performances during an annual meeting in Toronto that was broadcast across Canada and over the Internet.

Investors unhappy with Templeton’s recent stock-picking were assured that the markets’ investment style is turning back to traditional value and performances will improve.

“In this time of uncertainty, we’re very optimistic despite some pessimism that seems to be creeping into the market,” Mark Holowesko, vice president of Templeton Growth Fund and head of investments for Templeton Global Equity Group, told the meeting Thursday.

The majority of stocks have been losing ground, especially on the U.S. markets, he said at a meeting that lasted almost three hours. “The indexes have been going up, but more than 50% of the stocks have been in decline. Because of that we’ve been able to build positions in world class companies that have already fallen substantially in price and as a result our U.S. exposure has risen,” said Holowesko.

“To achieve superior long-term performance, you must look different from the crowd,” said Sean Farrington, portfolio manager of Templeton Growth Fund. “Investors don’t speculate. There are parts of the markets where [Templeton] think speculative excesses have reached dangerous levels. Focus on value rather than trends. At Templeton, we look beyond the short-term trends and try to uncover what we think are genuine undervalued, long-term bargains.”

Templeton Growth is now overweighted in energy stocks and materials and underweighted in technology, telecom, banks and financial service, unitholders were told. Since its launch in 1954, the fund has posted an average annual rate of return of 15%.

Templeton Management currently has over 2 million accounts in Canada, which is “impressive growth” compared to 1990’s holdings of about 100,000, said Don Reed, president of Templeton Growth.

Assets under management are $33 billion but the acquisition of Bissett & Associates will boost that figure to almost $38 billion.