For years emerging markets have lingered on the sidelines, overshadowed by the seemingly unstoppable rise of developed market equities. Yet a different mood has taken hold. Valuations look inviting and performance momentum has shifted.
Recent performance has underscored the point. In the first half of 2025, emerging market equities delivered a return more than double that of U.S. indices, an outcome that has challenged long-standing assumptions about risk and reward. The re-rating is not indiscriminate.
Vietnam has emerged as one of the more striking examples. Its economy has multiplied in scale since the mid-2000s, driven by a powerful combination of manufacturing growth and rising domestic consumption. Equity markets have responded, climbing strongly over the past year, yet valuations still look manageable compared with developed peers.
India, by contrast, tells a different story. The economy continues to expand at a healthy pace, but valuations have moved ahead of earnings. Growth in corporate profits has cooled even as multiples remain stretched, leaving investors more exposed to disappointment.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
