As the first trading week of 2026 unfolds, developing markets are approaching levels not seen in nearly two decades. This renewed momentum is being led by markets with high exposure to semiconductors and electronics, most notably Taiwan and South Korea, where investor appetite for AI-aligned growth has triggered a re-rating of some of the region’s largest firms. Taiwan Semiconductor Manufacturing Company and Samsung Electronics have both seen their shares push meaningfully higher, supported by growing conviction that their roles in the AI ecosystem will only deepen as generative workloads become more commercially entrenched.
Unlike previous periods where US equity strength left little room for emerging markets to outperform, current dynamics suggest a more nuanced environment. A softer US dollar has given risk assets in Asia and Latin America a further lift, and central banks in several developing economies are showing more flexibility around rate cuts, which has encouraged inflows into equity markets. These macro tailwinds, combined with a maturing AI investment theme, have given emerging markets a firmer footing than in past cycles.
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.
