Emerging markets are becoming a stronger investment opportunity. The broad asset class is improving structurally, but the bigger story for investors is that returns are increasingly being driven by specific countries, sectors and companies rather than by a single emerging markets label.
The case for the asset class is becoming more practical and more attractive because the best ideas are now easier to identify through country selection and stock selection.
Many of the old weaknesses in emerging markets have eased over time. Policy frameworks are stronger in many economies, domestic financial markets are more developed and some of the balance sheet pressures that once dominated investor thinking are less severe. That has supported a structural re-rating across parts of the emerging markets universe and is helping shift investor attention back towards the asset class.
Emerging markets now offer a wider set of investable themes, stronger internal differentiation and a more credible case for active allocation. The opportunity is no longer simply to own emerging markets. It is to own the right parts of emerging markets.
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.
