Fidelity Emerging Markets Limited (LON:FEML) has delivered a strong run in 2026, outperforming the MSCI EM Index by nearly 18 percentage points in the first half of the year as emerging market equities rallied amid geopolitical volatility.
According to Kepler Trust Intelligence, the trust posted NAV and share price total returns of 43.0% and 43.5% respectively to 30 June, compared with 25.5% for the MSCI EM Index and 11.2% for the MSCI World.
Managers Nick Price and Chris Tennant have been constructive on technology, increasing exposure to the sector and adding Taiwanese names such as Lotes, a manufacturer of CPU sockets used in AI servers. Performance has also been supported by holdings including Elite Material and SK Square, the holding company for Korean memory producer SK Hynix.
The portfolio remains overweight materials, with the managers still positive on copper and selective gold miners, although they have taken profits from some strong performers. They have also increased exposure to Brazil, where they see potential support from lower interest rates and the October presidential election. Holdings such as Itaúsa have been added or topped up.
In contrast, FEML remains underweight India, with the managers pointing to elevated valuations and risks including rising competition in financials and the threat of AI to some IT services businesses.
The trust’s discount narrowed over the past year but still stood at 7.5% at the end of June, versus a simple average of 6.7% for the AIC Global Emerging Markets sector. Kepler said this could offer an attractive entry point, particularly given the trust’s differentiated approach and use of derivatives to add exposure or take short positions.
FEML’s ongoing charges ratio is 0.83%, and the trust paid a dividend of $0.26 per share in FY 2025, equivalent to around 1.2% based on the 30 June share price of £15.30.
Kepler also noted that the trust’s five-year NAV total return of 79.1% outpaced the MSCI EM Index’s 47.3%, while its current net equity exposure stood at 112.2% as of the latest factsheet.
