Fidelity Emerging Markets Limited (LON:FEML) has published its fact sheet for the period to 31 December 2022.
Portfolio Manager Commentary
Emerging markets declined in December after a strong rebound in November. However, they outperformed developed markets. Sentiment turned negative after the Fed reinforced its hawkish stance on inflation-fighting monetary policy and delivered a 50- basis-point rate hike.
At the regional level, emerging Asia was the best performer with Chinese equities rising on the back of the easing of COVID-19 restrictions in more cities. On the commodity front, oil prices fell during a volatile month, as recessionary fears were replaced by hopes of the positive effects of China reopening. The portfolio’s positioning in China dragged on performance, although there were many Chinese stocks among the key contributors to relative returns. These were dominated in areas such as ecommerce, travel, and a series of consumer stocks.
At the sector level, IT stocks weighed on performance, with both South Korean and Taiwanese stocks among the detractors. Market participants worried about the Fed’s desire to tackle inflation, while the outlook for the tech sector was marred by concerns that the industry could be loss making. While these remain challenging times for the industry, we believe that those concerns are largely reflected in the price, and overall, this highly consolidated industry has robust prospects when taking a medium-term view.
On a rolling 12-month basis, the Company recorded NAV and share price returns of -24.1% and -25.0% respectively, compared to -10.0% for the index
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.