Kepler Trust Intelligence has highlighted Fidelity Emerging Markets Limited (LON:FEML) increasingly focused positioning across technology, materials and Brazil, alongside its use of derivatives and short positions to manage risk and broaden the opportunity set.
Fidelity Emerging Markets follows a high-conviction, bottom-up approach, focusing on businesses with strong market positions, underleveraged balance sheets, healthy free cash flow and governance structures aligned with minority shareholders. Its remit extends beyond large benchmark constituents, allowing the portfolio to invest in smaller companies, frontier markets and developed-market listings with meaningful emerging-market exposure.
A notable feature of the strategy is its use of derivatives. These instruments allow the managers to increase exposure to companies where conviction is high, while also taking short positions in businesses where fundamentals appear to be weakening. Short exposure is used selectively and is subject to portfolio limits, but it adds a further source of potential return alongside traditional long-only stock selection. It also introduces additional risk when short positions move against the portfolio.
Technology has become a larger area of focus. The portfolio moved from an underweight to an overweight position in the sector during the first half of 2026, with increased exposure to companies serving semiconductor, memory and artificial intelligence infrastructure markets.
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.
