Fidelity Emerging Markets Limited (LON:FEML) has announced its monthly factsheet for January 2024.
Portfolio Manager Commentary
Emerging market equities delivered negative absolute returns and underperformed developed markets in January. Sentiment was driven primarily by the US Federal Reserve and China. Markets declined on indications that the US Fed may keep interest rates higher for longer, while easier monetary policies in China failed to support markets. All regions posted negative returns, led by emerging Asia, followed by Latin America and emerging Europe, the Middle East and Africa (EMEA).
The portfolio outperformed the index in a falling market over the month. Certain stocks held within the financial sector supported performance. The largest contributor within the sector was Russia’s TCS Group, a provider of online retail financial services, which was fully exited in January, as the managers took steps to reduce exposure when liquidity was offered up. Brazil’s digital challenger bank Nu Holdings also rallied amid optimism around its expansion plans in Mexico and Colombia. On the contrary, HDFC Bank traded lower given concerns over weak net interest margins in its latest results. The position in Hong Kong listed AIA Group also declined as investors continued to reduce China related exposure.
The Company’s NAV fell 1.9% during the 12-month period ended 31 January 2024, outperforming its reference index which declined by 6.2%. The Company’s share price fell 1.3% 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.
