Emerging Markets are weathering macro headwinds

First, we had the end of easy money with synchronized monetary policy tightening in response to surging global inflation. Second, the Russia-Ukraine war erupted with significant impact on energy and fertiliser markets, and third we saw a continuation of China’s zero-Covid policy that significantly hampered the world’s second largest economy.

But last year wasn’t all doom and gloom. During the fourth quarter, Emerging Markets found support from a combination of events – a weaker US dollar, receding inflation and China’s pivot away from zero-Covid.

Recovering corporate earnings and confidence in the growth outlook for several Emerging economies also buoyed returns with the MSCI Emerging Markets Index generating a positive 1% return in sterling over the period. A small amount but a very welcome one after a challenging year.

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.

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