Investment trust Fidelity Emerging Markets (LON:FEML) delivered a net asset value (NAV) total return of 92.3% for the year to June 2026. This stunning performance trounced the 48.2% return from the MSCI Emerging Markets Index. It also represented a ‘resounding vindication’ of the managers’ investment approach, according to chair Heather Manners.
Fidelity Emerging Markets’ share price total return was even better at 99.3%, as the discount to NAV narrowed from 10.5% to 7.4%. This meant the fund effectively doubled investors’ money in FY26.
Following the period end, the trust passed its five-year performance test with flying colours, which means the 25% conditional tender will not take place.
Stellar performance
Not only did the £580 million cap trust’s NAV total return beat the benchmark for the fourth successive year, but the share price total return exceeded the NAV total return for a third year in a row. And high-flying Fidelity Emerging Markets outperformed the Index on both measures.
| AIC Global Emerging Markets | 1-yr share price total return (%) | 5-yr share price total return (%) |
| Fidelity Emerging Markets | 56.2 | 85.7 |
| Templeton Emerging Markets | 53.1 | 111.9 |
| JPMorgan Emerging Markets Dividend income | 38.7 | 84 |
| JPMorgan Emerging Markets Growth & Income | 37.9 | 45.4 |
| Mobius Investment Trust | 30.3 | 33.5 |
Source: The AIC/Morningstar
‘This is a resounding vindication of your portfolio managers, Nick Price and Chris Tennant, and their broad and flexible investment approach, not just an output of an increasingly positive period for emerging markets as a whole,’ commented Manners.
‘Over the 12 months under review the performance has been truly stellar, and the board and I would like to congratulate the portfolio managers and their team on these results and thank them for their efforts.’
More winners than losers
During FY26, Fidelity Emerging Markets’ performance benefited from strong stock selection in information technology, materials and industrials, together with positive contributions from both the long and short books.
At the country level, Taiwan contributed positively through a combination of stock selection and positioning. And lower exposure to mainland China also added value during a period when the Chinese market lagged the wider index.
At the stock level, the top contributor overall was SK Square (KRX:402340), the holding company for Korean memory chip producer SK Hynix (NASDAQ:SKHY).
Key detractors included Naspers (JSE:NPN), the South African holding company with a stake in China’s Tencent (HKG:0700), which declined over concerns that Tencent is falling behind peers in AI. ‘However, this position was partly offset by the underweight exposure to Tencent itself,’ explained the managers.
Sharesify applauds Price and Tennent for racking up such strong performance figures at Fidelity Emerging Markets. We particularly like the fact the managers use the broad investment toolkit at their disposal. This includes the ability to short stocks, sell options to generate income and buy small and mid-sized firms.
Performance has been so strong that it is ranked in the top 10 of all investment trusts for NAV and share price total return over both one and three years to 30 June 2026.
Some investors may believe they have missed the boat when it comes to emerging markets. But the managers remain positive on the opportunity set, arguing that the recent rally has been driven more by higher earnings expectations than multiple expansion. They point out that emerging markets still trade at a rough 40% discount to developed markets.
