A number of emerging markets have exhibited accelerated growth and are representing an increasing share of the global economy. Building on the encouraging post-pandemic trends of last year, emerging market equity performance started 2023 strong. While growth has slowed in the U.S. and Western Europe, institutional investors are encouraged by China’s reopening as well as favorable structural trends in a number of Asian, Latin American and African economies, and they’re taking a closer look at these markets for diversification and return.
Valuations that had fallen dramatically in several emerging markets now look attractive, as many emerging markets forecast an economic growth premium over developed markets. Idiosyncratic political and market risks still persist, but that uncertainty can mask opportunities for a long-term diversified investor, according to asset managers who advise investors to take a selective and active approach across the emerging markets that also reduces concentration risk.
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.