Emerging markets (EM) are in a state of transition this year as they work through the structural shocks left by the coronavirus pandemic and Russia’s invasion of Ukraine. It’s been a strong start so far thanks to China’s reopening and markets pricing in the goldilocks scenario of declining inflation and a soft landing. But given how difficult this benign outcome is to achieve, risks remain, in our view. How this all plays out over the next few months will likely have important implications for how EM assets perform in 2023.
China’s economy is reopening and at a much faster pace than anticipated. As expected, economic activity has initially been disrupted, as it was in Hong Kong and Taiwan when they lifted restrictions from a similar starting point.
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.