Fidelity Emerging Markets Limited (LON:FEML) monthly factsheet for the period ended 28 February 2023
Portfolio Manager Commentary
Emerging markets disappointed in February and underperformed most developed markets. Global risk-off sentiment was triggered by expectations of more aggressive interest rate hikes, which prompted a rise in the US dollar and hampered gains within the region. Against this backdrop, emerging markets posted negative returns.
The portfolio outperformed the index over the month, despite delivering negative absolute returns in the weaker market environment. Select holdings in the financials sector supported relative performance as value stocks outperformed their growth counterparts over the month. Shares in Kazakhstan’s Kaspi continued to trade higher after the company reported impressive financial results and provided robust guidance for 2023, while Greece’s Piraeus Financial Holdings also rose after it reported better-than-expected earnings.
A number of Chinese holdings performed poorly over the month after coming under pressure from increased geopolitical tensions between the US and China. There was particular weakness among internet stocks such as Alibaba Group, while a series of others consumer names including Li Ning and Zhongsheng Group were also among key detractors. Hong Kong-listed Techtronic Industries was another key detractor after a short selling agency released a negative report on the company.
On a rolling 12-month basis, the Company recorded NAV and share price returns of -7.8% and -12.4% respectively, compared to -6.1% 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.
