Fidelity Emerging Markets Limited: All regions post positive returns in July

Fidelity Emerging Markets Limited (LON:FEML) published its monthly factsheet for July 2023.

Portfolio Manager Commentary
Emerging markets advanced in July. Sentiment was mixed towards the start of the month as investors evaluated the outlook for interest rates, with a resilient US labour market coinciding with other indications of easing inflation. Emerging market equities rallied towards the end of the month, after China’s politburo indicated that it would extend stimulus measures to support the property sector and boost consumption. Better than expected US CPI data also buoyed markets. Against this backdrop, all regions posted positive
returns, led by emerging Europe, the Middle East and Africa (EMEA), followed by emerging Asia and Latin America.

The portfolio underperformed the index over the month. Certain financial names detracted following strong performance in the first half of the year. This included HDFC Bank, which lagged after announcing Q1 results. Kazakhstan’s Kapsi bucked the trend and enhanced gains after it reported quarterly results that were ahead of expectations.

Names in the materials sector performed well over the month. First Quantum Minerals advanced in line with higher copper prices due to hopes of stimulus in China. This also supported a number of Chinese consumer stocks, including sportswear company Li Ning and auto maker Brilliance Autos. Stock selection in the energy sector also contributed to returns.

On a rolling 12-month basis, the Company recorded NAV and share price returns of 1.6% and 0.1% respectively, compared to 2.5% 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.

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