Fidelity Emerging Markets Limited (LON:FEML) has announced its monthly factsheet for October 2023.
Portfolio Manager Commentary
The Trust’s NAV rose 2.6% during the 12-month period ended 31 October 2023, underperforming its reference index which rose by 5.1%. The Trust’s share price rose 5.7% over the same period.
Emerging markets declined in October and marginally underperformed developed markets as tensions in the Middle East and rising government bond yields dented risk appetite, while a higher-than-expected US inflation reading raised the prospect that interest rates would stay elevated for longer. Indications that China was embarking on a round of fiscal stimulus and improved macroeconomic data from the country provided some comfort to investors. All regions posted negative returns, led by Latin America, Emerging Asia and Emerging Europe, the Middle East and Africa (EMEA).
The portfolio marginally outperformed the index over the month. Stock selection in Korea and Taiwan underpinned returns, but names in Mexico and Canada detracted. Nu Holdings (Brazil), a digital banking and payments platform, was the top contributor to performance. The outlook is promising with growth in its main credit products driven by its financing for Pix, an instant payment method, and personal loan origination. Insurer AIA Group (Hong Kong) also enhanced gains follow a stronger than expected rebound in its Mainland China Visitors business.
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.
