Fidelity Emerging Markets Limited (LON:FEML) has announced its monthly factsheet for July 2024.
Portfolio Manager Commentary
Emerging markets (EM) were broadly flat in July and underperformed developed markets. Despite the growing likelihood the Federal Reserve would cut interest rates in September, EM equities pulled back amid growing risk-off sentiment, which gathered pace following the end of the month, as concerns around a US recession emerged. Noise surrounding the US election also impacted the asset class during July, as did the global sell-off in technology stocks and continued weakness in China.
The portfolio slightly outperformed the index over the month. At a sector level, stock picking across the industrials and materials sectors contributed positively. In materials, South African cement company PPC Limited climbed higher with broader South African market.
Conversely, the financial sector was the largest detractor from relative returns. This was in part due to the underperformance of Indian private lenders Axis Bank and HDFC Bank, which declined despite delivering quarterly results that were largely in-line with estimates, in part due to investor caution following the release of draft guidelines by Reserve Bank of India calling for tighter liquidity requirements to prevent any potential asset quality issues.
The Company’s NAV rose 15.3% during the 12-month period ended July 2024, outperforming its reference index which rose by 6.4%. The Company’s share price rose 20.2% over the same period
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.
