After outperforming in 2025, emerging markets have drawn a mix of caution and curiosity from investors. Scepticism is understandable. Since 2010, the MSCI Emerging Markets Index has failed to beat its US counterpart for two years in a row. But the drivers behind last year’s gains, dollar weakness, stable global growth and renewed appetite for diversification, are still intact.
Following fresh political tensions, including US efforts to assert control over overseas oil and minerals, central banks and sovereign funds are moving to secure reserves of gold, copper, nickel and other industrial inputs. These materials are essential to sectors like robotics, electric vehicles and AI data centres. As demand rises, exporters across the Global South stand to benefit. Equity markets in Chile, Brazil and South Africa, historically linked to their respective resource profiles, are positioned to capture these flows.
Venezuela, once locked out of global bond markets after defaulting in 2017, is now the subject of restructuring talks. Meanwhile, Saudi Arabia is accelerating reforms to attract foreign investment. From February, non-residents will be allowed direct access to domestic equities and real estate, excluding the two holy cities. This follows underperformance in 2025 and reflects a broader push to open the market.
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.
