Emerging markets have become more relevant as earnings improve, policy conditions turn more supportive and capital flows shift away from heavily concentrated developed-market positions.
The case is about reducing dependence on one country, one sector and one investment theme.
Emerging-market equities have outpaced developed markets and the S&P 500 since the start of 2025.
Technology is a major part of the opportunity. Taiwan is central to advanced semiconductor manufacturing and packaging. South Korea is a leader in memory chips. China adds scale, industrial capacity and supply-chain integration.
Together, these markets provide exposure to parts of the artificial-intelligence supply chain that are less prominent in US indices, which are more heavily influenced by software, cloud and platform companies.
Earnings have also improved. After two years of declines, emerging-market earnings returned to growth in 2024 and strengthened further in 2025. Expectations for continued growth in 2026 support the case that recent market gains are linked to better business performance.
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.
