Fidelity Emerging Markets Limited - Half-year Financial Report
Fidelity Emerging Markets Limited
HALF YEAR REPORT
for the six months ended 31 December 2025
-- During the six-month period ended 31 December 2025 , Fidelity Emerging
Markets Limited outperformed the benchmark
-- The share price total return was +38.9%while the Net Asset Value (NAV)
return was +35.5%,
-- Over the same timeframe, the benchmark index, the MSCI Emerging Markets
Index, returned +18.1%
-- The company’s extensive ‘toolkit’ contributed positively to performance,
with long and short positions adding to performance alongside
smaller-cap holdings
-- Long positions in materials, commodities, and gold miners also added
notable value
Financial Highlights
31 December 30 June
2025 2025
Assets
USD
Gross Asset Exposure1 $1,086.0m $1,235.3m
Equity Shareholders’ Funds $692.5m $771.6m
NAV per Participating Preference Share2 $15.55 $11.99
Gross Gearing2,3 56.8% 60.1%
Net Gearing2,4 6.0% 5.5%
GBP
Gross Asset Exposure1,5 £807.4m £901.4m
Equity Shareholders’ Funds5 £514.9m £563.1m
NAV per Participating Preference Share2,5 £11.56 £8.75
Participating Preference Share Price and Discount Data
Participating Preference Share Price at the period end £10.66 £7.83
Discount to NAV per Participating Preference Share at 7.79% 10.51%
period end2
Number of Participating Preference Shares in issue 44,522,961 64,342,245
Earning for the six months ended 31 December 2025 2024
Revenue Earnings per Participating Preference Share6 $0.12 $0.17
Capital Earnings/(Loss) per Participating Preference $2.79 ($0.37 )
Share6
Total Earnings/(Loss) per Participating Preference Share6 $2.91 ($0.20 )
Ongoing charges ratio2 0.83% 0.84%
1 The value of the portfolio exposed to market price movements.
2 Alternative Performance Measures. See Glossary of Terms.
3 Gross Asset Exposure less Equity Shareholders’ Funds expressed as a percentage of Equity Shareholders’ Funds.
4 Net Market Exposure less Equity Shareholders’ Funds expressed as a percentage of Equity Shareholders’ Funds.
5 The conversion from USD to GBP is based on exchange rates prevailing at the reporting dates.
6 Calculated based on weighted average number of Participating Preference Shares in issue during the period.
For further information please contact:
Company Secretary,
George.bayer@fil.com or +44 20 7961 4240
Chairman’s Statement
In a year that began with the inauguration of the new US administration and continued with the imposition of various trade tariffs – particularly on Asian and Latin American countries – it is perhaps surprising that emerging markets significantly outperformed their developed counterparts in 2025. Indeed, the 24.4% 12-month sterling total return of the MSCI Emerging Markets Total Return Index (‘the Index’) was almost double the 12.7% total return from the US-dominated MSCI World Index. This is despite the S&P 500 Index of leading US stocks reaching no fewer than 38 new all-time highs during the year, as the rollout of artificial intelligence technologies continued to drive returns for some of its largest constituents.
In their Portfolio Managers’ Report on the following pages,
Against such a positive backdrop, it is very pleasing to report that the Company outperformed strongly between 1 July and
While all the supportive market factors outlined above fed into this very favourable period of performance for the Company, to beat a rising market so emphatically requires a high degree of differentiation. Your Portfolio Managers’ extended investment toolkit helped in this regard, with the short book having a positive impact even in a rising market.
Short positions accounted for more than 5% of the outperformance in the period under review. Certain themes also proved key in their contribution, including a large overweight in materials, concentrated in precious metals (a store of value in times of higher inflation) and copper, which is a vital component in electrification. Materials made up nearly 29% of the gross portfolio at 31 December versus just over 7% of the Index, so it is clear that holders of an index fund would not have benefited from the performance of this theme to anything like the same degree. In relation to other themes, particularly in industrials and technology, stock selection also contributed substantially.
Your Board remains committed to the advantages of active investing, especially in eras of change in market leadership, and this is an excellent example of how active investment management can enhance returns and how your Company’s go-anywhere process can deliver.
Furthermore, we remind investors that the Company’s Russian holdings remain valued at zero due to Russia’s ongoing invasion of
Outlook
Since the end of the reporting period, the macroeconomic and geopolitical landscape has shifted dramatically and become more volatile. This means that the outlook for emerging markets has become more uncertain in the short-term. Amid the volatility, opportunity emerges to acquire good quality businesses at particularly attractive valuations. The Board is confident that the team at Fidelity can make best use of the extended investment toolkit and, have the necessary experience to navigate these turbulent waters and we believe that despite undeniable short-term uncertainty the long-term case for investing in emerging markets remains strong.
Board composition
There have been no changes to the Board of Directors in the period under review. However,
In
Discount management
During the period under consideration, the Company’s discount to NAV narrowed from 10.5% to 7.8%. While investment trust discounts in general also narrowed during the period (from 14.0% to 12.5% on average), your Board believes the Company’s below-average discount reflects a number of factors. These include the strong performance of the FEML portfolio, our differentiated investment process and the clearly growing appetite for emerging markets, Fidelity’s strong brand and clear marketing strategy and Nick and Chris’s growing presence and strong messaging in the media and at many investor events, as well as their regular insightful contributions online via our website.
However, we also recognise the importance to investors of taking direct action to limit the discount, and as such we have continued to buy back shares in the market when the discount is sufficiently wide that taking such action would have a positive impact on NAV, repurchasing 3,378,107 shares (excluding the
I would also remind readers that the Company has committed to undertake a tender offer for up to 25% of its then shares in issue (excluding any shares held in treasury) should its NAV total return fail to exceed the benchmark over the five years ending on
2025 AGM and final dividend
The Company held its Annual General Meeting (AGM) on
At the AGM, shareholders approved the final dividend of
The Board will review the final dividend payment for FY26 later in the year based on dividend receipts from the companies held in the portfolio.
As I write this towards the end of the third quarter of our financial year, while the rapidly changing geopolitical landscape may lead to volatility in the near term, I remain optimistic about the longer-term outlook for emerging markets. Strong underlying fundamentals, attractive valuations and supportive structural growth drivers continue to underpin the investment case. In this context, I believe the Company remains well placed to benefit from the opportunities that these markets can offer over time.
Portfolio Managers’ Half Year Review
Macroeconomic Review
Emerging markets delivered exceptional performance in 2025 and continued to rally over the last six months of the year, outperforming developed markets. The backdrop for EM remained supportive, with several interest-rate cuts from the Fed boosting sentiment, alongside the presence of a much more balanced US dollar than we have seen in recent years. Performance was supported by strong returns in several Asian markets, particularly
Please note the period for this investment review is
Portfolio performance: Six months to 31
December 2025
It was a strong period of performance for the investment company, which delivered net asset value (NAV) total returns of 34.5% vs. the index which returned 18.1% (GBP, net of fees). It was pleasing to see the portfolio’s enhanced toolkit have a positive effect on performance, with contributions from the long and short books, the latter notable given the market performed so well, as well as from yield enhancement. In addition to robust investment performance, there was an uplift to the NAV per share of approximately 4.5% following the conditional share repurchase conducted in Q4.
The drivers of this outperformance were broad based, with the strongest contribution coming from our materials exposure, where we have a considerable overweight. Gold miners have benefitted from the continued shift in central bank reserves away from US Treasuries, as well as strong retail demand for the precious metal, both of which underpinned the rally in the commodity. Here, some of our smaller-cap positions performed particularly well, with
Stock picking in industrials was also positive, with one of our newer additions to the portfolio, Chinese power equipment maker
Sieyuan Electric
, contributing off the back of a series of strong quarterly results, underpinned by margin expansion and a rising market share. Korea’s
SK Square
, the holding company for memory company SK Hynix, also performed well, supported by the strong supply-demand outlook for memory, and went some way to offsetting the detraction from the underweight positioning in
The portfolio enjoyed some of the tailwinds of AI-driven demand over the period, with stock picking in IT being another contributor to returns. Here, Taiwan’s Elite Material , a maker of copper-clad laminate, which we added to at the nadir of the post-Liberation Day tariff fallout, rose on continued strong demand supported by hyperscaler investment in data centres. There were however some notable detractors within the short book, including in an Asian memory chip designer which rallied with other legacy memory names on rising DRAM prices, despite having no exposure to this type of memory.
The exposure to financials was more challenging during the period with stock picking and the overweight positioning detracting. Kazakhstan’s dominant e-commerce and payments platform Kaspi was among the key detractors, weighed down by the market’s high interest rates, as well as some concerns around smartphone registering rules and the suspension of the dividend to fund the acquisition of a Turkish business. We see the latter two issues as largely transitory, and the inflation backdrop has started to improve, so we continue to have conviction in the stock, especially given its cheap valuation and dominant position in the local consumer finance and e-commerce segments. Broader weakness in the Indian market also dragged on some of our Indian financial positions, including SME lender Five Star Business Finance , which suffered from a regulatory push to curtail non-bank lending, although the company is still growing quickly. However, it was positive to see our underweight positioning in the Indian market offset this somewhat.
Stock picking in consumer discretionary was another weaker area during the period, driven in part by the overweight exposure to South African holding company
Naspers
(which holds a large stake in China’s Tencent), which underperformed as local investors rotated into precious metal stocks given strength in this segment. Polish auto parts distributor
The overall exposure to
Portfolio positioning as of 31
December 2025
The focus continues to be on holding long positions in well capitalised businesses with under-levered balance sheets, whilst looking for short opportunities among companies with a deteriorating fundamental outlook or with broken balance sheets.
Over the second half of 2025 the materials exposure increased, in part due to organic growth from strong performance, making it the portfolio’s most significant overweight, with exposure predominantly concentrated in copper and gold.
In copper, we are entering a decade of stronger growth, driven by EVs and related infrastructure, grid investment to facilitate the energy transition, and data centre demand, whilst a lack of greenfield discoveries and a reduction in the quality of key mining assets will lead to weaker supply growth. As at year end we held miners including
We also like gold miners, where the market seems to have entered a new paradigm with the traditional inverse relationship with real yields weakening following the confiscation of Russian reserves and the deterioration of fiscal conditions in the West. Here, many producers are trading on attractive free cash flow yields at spot and are likely to either re-rate or get acquired given the consolidation we are seeing. We were active in managing exposure, trimming positions where the risk-reward became less attractive, such as South Africa’s
We continue to have significant exposure to
financials
, where exposure is diversified across regions. Many smaller EM countries have oligopolistic banking structures, meaning they generate high returns on equity but trade at very low multiples, so it is an area where we see huge opportunity. Held in the portfolio are numerous value plays, including in
CEE markets
where several names are extremely cheap but have little sensitivity to rate cuts, such as Hungary’s
OTP Bank
, as well as several fintechs, including Brazilian digital challenger bank
Our exposure to information technology is focused in technology hardware with an underweight to IT services companies, which we think are under pressure from AI-related disruption. Our largest absolute position at year end was in Taiwanese semiconductor foundry TSMC , where we continue to have a very positive view, given the company is yet to flex its pricing power despite the fact that it holds a monopoly over the market. We expect TSMC to increase prices this year, creating significant upside. We also like Taiwanese copper-clad laminate producer Elite Material , an R&D focused business with high barriers to entry that is geared to data centre trends, operating in a near monopoly with a strong competitive moat. We focused on diversifying our technology hardware exposure over the period, introducing a new position in Taiwan’s Wiwynn , an ODM producer of servers focused exclusively on hyperscale customers which sold off on concerns around a near-term slowdown in demand, providing a good entry point into what we think is the best-run ODM in the sector. We were also active to take profits in stocks that had run ahead of fundamentals, exiting for example Taiwanese testing equipment manufacturer Chroma ATE after it rallied significantly from April lows, leaving the risk-reward less attractive.
At year end we had an overweight exposure to the memory space, where memory manufacturers have become far more disciplined in capital deployment with an effective oligopoly between three players supporting a strong demand backdrop with limited capacity additions and ongoing de-commoditisation of the sector. Here we hold Korea’s
Samsung Electronics
and
SK Hynix
, although over the period we trimmed these names to take some profits and shift some exposure to their holdcos (
At a country level, we continue to have an underweight exposure to mainland
Looking to other parts of the market, we remained underweight Chinese banks, a sector experiencing net interest margin compression and which at some point will face a very negative credit cycle. We have also become more sceptical on the outlook for Chinese consumption and believe it will be hard to drive a sustained recovery in Chinese housing, while much of the recovery in demand has been driven by short-term tailwinds like trade-in subsidies, which only pull forward demand. As a result, the exposure to
consumer goods
sectors was reduced. This has included trimming exposure to the sportswear market, including
Elsewhere in
On the other hand, at year end we were overweight
In
Within the short book , exposure is diversified and stock-specific, with an effort to avoid crowded shorts. We typically look for two main traits: companies with fundamentals experiencing a structural or cyclical decline, and red flags around the balance sheet. Key positions include shorts in the Asian battery value chain , which form a pair trade with CATL . These companies are losing money, have weak balance sheets and a much smaller R&D budget than CATL. Elsewhere we hold several short materials positions, including an Asian agrochemical company facing a patent cliff and an EMEA agrochemicals business where the valuation is a hangover from the 2022 bull market, despite negative gross margins and high debt levels. Over the period, we introduced a short in an Asian e-commerce company , where competitive pressures are eroding profitability, and an Asian auto parts manufacturer with unsustainable debt levels, whose returns have been challenged by the commoditisation of its core business.
Outlook
The outlook for EM appears constructive. The asset class continues to benefit from a relatively strong fiscal position vs DMs, attractive valuations despite last year’s rally, and a supportive earnings backdrop, underpinned by commodity strength and AI-driven demand for key EM tech companies. That said, recent concerning events in the
Taking a step back, the fiscal backdrop in EM remains supportive. The US continues to run an elevated deficit, with growing scrutiny around debt sustainability. By contrast, many EM economies have shown greater fiscal restraint in this cycle. While US policy uncertainty has weighed on appetite for US assets, key EM markets such as
A weaker USD, driven in part by fiscal expansion in the US, has been supportive for EM over the past year. Clearly, higher oil prices could lift inflation and increase the likelihood of tighter Fed policy, potentially strengthening the USD, particularly in a risk-off environment. However, it is important to point out that many EM economies are now less reliant on dollar funding than in previous cycles, reducing sensitivity to USD moves.
The backdrop remains favourable for key mined commodities, particularly for copper and gold, supporting terms of trade and domestic demand in exporting markets such as
Technology is another tailwind for EM, and one that is likely to persist despite geopolitical turbulence. While AI enthusiasm has driven US equity performance in recent years, critical parts of the AI supply chain sit in EM, particularly in
EM as an asset class is not without risks, and recent developments in the
Portfolio Managers
Spotlight on the Top 5 Holdings
as at
The top five holdings comprise 32.1% of the Company’s Net Assets.
Taiwan Semiconductor Manufacturing
Industry: Information Technology
Country:
% of Net Assets : 13.7%
TSMC is a pre-eminent Taiwanese semiconductor foundry with leading-edge technology, which reinforces the company’s competitive position and ability to generate incremental return on invested capital. The company has built a technological moat over the past three decades and occupies an especially dominant position at the forefront of the industry as competitors have dropped from the race due to technical hurdles and the barrier of high required capital expenditures. TSMC’s ability to hire the best talent while continuously improving its know-how keeps it ahead of the competition and able to generate cashflow to feed back into investing in R&D and capacity.
Naspers
Industry: Consumer Discretionary
Country:
% of Net Assets : 7.7%
Naspers is a global internet and entertainment group and one of the world’s largest technology investors. It is a South African holding company specialising in internet investments and operates in more than 120 countries and markets with long-term growth potential. It runs some of the world’s leading internet, video entertainment, and media platforms. The company owns a sizeable stake in Tencent, the Chinese multinational technology and entertainment conglomerate. Naspers operates in various sectors, including online classifieds, food delivery, payments, travel, education, health, and social and internet platforms.
Pan African Resources
Industry: Materials
Country:
% of Net Assets : 4.0%
Pan African Resources is a
Samsung Electronics
Industry: Information Technology
Country:
% of Net Assets : 3.6%
Samsung Electronics is a diversified Korean technology company, with a significant presence in consumer electronics and a leading position as one of three major players in the global memory industry.
OTP Bank
Industry: Financials
Country:
% of Net Assets : 3.1%
OTP Bank is the dominant banking franchise in
Twenty Largest Investments
as at
The Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Fair Value is the realisable value of the portfolio as reported in the Statement of Financial Position. Where the Company holds shares, the Asset Exposure and Fair Value will be the same. For derivative instruments, Asset Exposure is the market value of the underlying asset to which the Company is exposed, while the Fair Value reflects the profit or loss on the contract since it was opened, and is based on how much the share price of the underlying asset has moved.
Fair
Asset Exposure
value
Asset Exposures – shares unless otherwise stated $’000 %1 $’000
Taiwan Semiconductor Manufacturing
(shares, options and long CFDs)
Information Technology 95,010 13.7 78,306
Naspers (shares, option and long CFD)
Consumer Discretionary 53,437 7.7 639
Pan African Resources
Materials 27,897 4.0 27,897
Samsung Electronics (long CFDs)
Information Technology 25,128 3.6 1,880
OTP Bank
Financials 21,466 3.1 21,466
Aura Minerals (option and long CFD)
Materials 20,686 3.0 1,443
Contemporary Amperex Technology
Industrials 20,446 3.0 20,446
Sieyuan Electric
Industrials 20,292 2.9 20,292
TBC Bank Group (long CFDs)
Financials 19,289 2.8 252
Cia de Minas Buenaventura (long CFD)
Materials 17,169 2.5 (216)
NU Holdings (option and long CFDs)
Financials 16,803 2.4 77
Endeavour Mining (option and long CFDs)
Materials 16,607 2.4 920
Torex Gold Resources (long CFD)
Materials 16,516 2.4 342
Elite Material (long CFD)
Information Technology 16,387 2.4 414
SK Hynix
Information Technology 15,588 2.3 15,588
Kaspi.KZ (option and long CFD)
Financials 14,761 2.1 235
Aris Mining (long CFD)
Materials 14,636 2.1 443
SK Square
Industrials 14,596 2.1 14,596
Wiwynn
Information Technology 13,418 1.9 13,418
Orizon Valorizacao de Residuos
Industrials 13,399 1.9 13,399
Twenty largest exposures 473,531 68.3 231,837
Other exposures 767,830 110.9 390,420
Total exposures before index hedging 1,241,361 179.2 622,257
Less: index hedging
MSCI Emerging Markets Index (future) (155,395) (22.4) (2,515)
Total exposures from index hedging (155,395) (22.4) (2,515)
Total exposures after the netting of index hedging 1,085,966 156.80 619,742
Forward currency contracts 205
Portfolio Fair Value3 619,947
Net current assets (excluding derivative assets and 72,558
liabilities)
Total Net Assets 692,505
1 Asset Exposure (as defined in the Glossary of Terms) expressed as a percentage of Net Assets.
2
Gross Asset Exposure comprises market exposure to investments of
3
Portfolio Fair Value comprises investments of
Interim Management Report
Principal and Emerging Risks and Uncertainties, Risk Management
In accordance with the AIC Code, the Board has in place a robust process for identifying, evaluating and managing the principal risks and uncertainties faced by the Company, including those that could threaten its business model, future performance, solvency or liquidity. The Board, with the assistance of the Manager, has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key existing and emerging risks and uncertainties faced by the Company. The list of risks includes: geopolitical risk; volatility of emerging markets and market risk; investment performance risk; changing investor sentiment; cybercrime and information security risk; level of discount to net asset value risk; lack of market liquidity risk; business continuity and event management risk; gearing risk; foreign currency exposure risk; environmental, social and governance (ESG) risk and key person risk. Full details of these risks and how they are managed are set out on pages 23 to 27 of the Company’s Annual Report for the year ended
The Manager also has responsibility for risk management for the Company. It works with the Board to identify and manage the principal and emerging risks and uncertainties and to ensure that the Board can continue to meet its Corporate Governance obligations.
Key emerging issues that the Board has identified include; rising geopolitical tensions including recent events in the
Please note the period for this risk review is
The Board seeks to ensure high standards of business conduct are adhered to by all of the Company’s service providers and that agreed service levels are met. The Board is responsible for promoting the long-term success of the Company for the benefit of all stakeholders and in particular its shareholders. Although the majority of the day-to-day activities of the Company are delegated to the Manager, the Investment Manager, and other third-party service providers, the responsibilities of the Board are set out in the schedule of matters reserved for the Board and the relevant terms of reference of its committees, all of which are reviewed regularly by the Board.
Transactions with the Alternative Investment Fund Manager and Related Parties
Going Concern
In accordance with provision 35 of the 2024 AIC Code of Corporate Governance, the Directors have assessed the prospects of the Company over a longer period than the twelve month period required by the “Going Concern” basis. The Company is an investment fund with the objective of achieving long-term capital growth by investing in emerging markets. The Board considers long-term to be at least five years, and accordingly, the Directors believe that five years is an appropriate investment horizon to assess the viability of the Company, although the life of the Company is not intended to be limited to this or any other period.
The Directors have considered the Company’s investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio and its expenditure and cash flow projections.
This conclusion also takes into account the Board’s assessment of the ongoing risks as outlined on the previous pages. The Board continues to review emerging risks that could have a potential impact on the operational capability of the Investment Manager and the Company’s other key service providers. During the period under review, the Board received updates from Fidelity and other key service providers confirming that they continued to service the Company in line with service level agreements and have suitable and robust business continuity arrangements in place.
The Directors, having considered the liquidity of the Company’s portfolio of investments (being mainly securities which are readily realisable) and the projected income and expenditure, are satisfied that the Company is financially sound and has adequate resources to meet all of its liabilities and ongoing expenses and can continue in operational existence for a period of at least twelve months from the date of this Half Year Report.
Accordingly, the Financial Statements of the Company have been prepared on a going concern basis.
Continuation votes are held every five years and the next continuation vote will be put to shareholders at the AGM in 2026.
Responsibility Statement
In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules, the Directors confirm that to the best of their knowledge:
• the condensed set of financial statements contained within the Half Year Report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ and gives a true and fair view of the assets, liabilities, financial position and return of the Company;
• the Half Year Report includes a fair review of the development and performance of the Company and important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements;
• the Half Year Report includes a description of the principal risk and uncertainties for the remaining six months of the financial year; and
• the Half Year Report includes a fair review of the information concerning related party transactions.
The Half Year Report has not been audited or reviewed by the Company’s Independent Auditor.
For and on behalf of the Board
Chairman
Statement of Comprehensive Income
for the six months ended
Six months ended 31 Six months ended 31 Year ended 30 June 2025
December 2025 December 2024
audited
unaudited unaudited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue
Investment 4 8,858 – 8,858 10,127 – 10,127 22,941 – 22,941
income
Derivative 4 11,782 – 11,782 15,830 – 15,830 26,855 – 26,855
income
Other income 4 510 – 510 361 – 361 631 – 631
Total Income 21,150 – 21,150 26,318 – 26,318 50,427 – 50,427
Net gains/
(losses) on
investments
at fair value – 139,521 139,521 – (9,533) (9,533) – 80,979 80,979
through
profit or
loss
Net gains/
(losses) on – 28,797 28,797 – (14,304) (14,304) – 32,226 32,226
derivative
instruments
Net foreign
exchange – (2,272) (2,272) – (1,108) (1,108) – (1,475) (1,475)
losses
Total income
and gains/ 21,150 166,046 187,196 26,318 (24,945) 1,373 50,427 111,730 162,157
(losses)
Expenses
Management 5 (467) (1,868) (2,335) (447) (1,789) (2,236) (863) (3,451) (4,314)
fees
Other (932) – (932) (828) – (828) (1,644) – (1,644)
expenses
Profit/(loss)
before 19,751 164,178 183,929 25,043 (26,734) (1,691) 47,920 108,279 156,199
finance costs
andtaxation
Finance costs 6 (11,294) – (11,294) (11,672) – (11,672) (23,704) – (23,704)
Profit/(loss)
before 8,457 164,178 172,635 13,371 (26,734) (13,363) 24,216 108,279 132,495
taxation
Taxation (1,146) 79 (1,067) (1,095) 289 (806) (2,347) (3,162) (5,509)
Profit/(loss)
after
taxation for
the period
attributable 7,311 164,257 171,568 12,276 (26,445) (14,169) 21,869 105,117 126,986
to
Participating
Preference
Shares
Earnings/
(loss) per
Participating 7 $0.12 $2.79 $2.91 $0.17 ($0.37 ) ($0.20 ) $0.31 $1.52 $1.83
Preference
Share (basic
and diluted)
The Company does not have any income or expenses that are not included in the profit/(loss) after taxation for the period. Accordingly, the profit/(loss) after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Company’s Statement of Comprehensive Income prepared in accordance with IFRS. The supplementary information on the allocation between the revenue account and the capital reserve is presented under guidance published by the AIC.
All the profit/(loss) and total comprehensive income is attributable to the equity shareholders of the Company. There are no minority interests.
No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.
Statement of Changes in Equity
for the six months ended
Share
Capital Revenue Total
premium
Note reserve reserve equity
account
$’000 $’000 $’000
$’000
Six months ended 31 December 2025
(unaudited)
Total equity at 30 June 2025 6,291 706,238 59,099 771,628
Profit after taxation for the period – 164,257 7,311 171,568
Participating Preference Shares 9 – (43,351) – (43,351)
repurchased and cancelled
Participating Preference Shares
repurchased and cancelled for 9 – (193,927) – (193,927)
Strathclyde Pension Fund
Buyback expenses – (1,075) – (1,075)
Dividend paid to shareholders 8 – – (12,338) (12,338)
Total equity at 31 December 2025 6,291 632,142 54,072 692,505
Six months ended 31 December 2024
(unaudited)
Total equity at 30 June 2024 6,291 695,822 51,333 753,446
(Loss)/profit after taxation for the – (26,445) 12,276 (14,169)
period
Participating Preference Shares 9 – (47,508) – (47,508)
repurchased into Treasury
Dividend paid to shareholders 8 – – (14,103) (14,103)
Total equity at 31 December 2024 6,291 621,869 49,506 677,666
Year ended 30 June 2025 (audited)
Total equity at 30 June 2024 6,291 695,822 51,333 753,446
Profit after taxation for the year – 105,117 21,869 126,986
Participating Preference Shares 9 – (94,701) – (94,701)
repurchased into Treasury
Dividend paid to shareholders 8 – – (14,103) (14,103)
Total equity at 30 June 2025 6,291 706,238 59,099 771,628
Statement of Financial Position
as at
31 December 30 June 31 December
2025 2025 2024
Note
unaudited audited unaudited
$’000 $’000 $’000
Non-current assets
Investments at fair value through profit 10 611,772 712,861 632,011
and loss
Current assets
Derivative assets 10 19,787 15,006 13,984
Amounts held at futures clearing houses and 47,389 52,521 44,876
brokers
Other receivables 9,080 9,504 2,007
Cash at bank 23,966 9,551 1,751
100,222 86,582 62,618
Current liabilities
Derivative liabilities 10 11,612 15,784 13,660
Other payables 7,877 12,031 3,303
19,489 27,815 16,963
Net current assets 80,733 58,767 45,655
Net assets 692,505 771,628 677,666
Equity
Share premium account 6,291 6,291 6,291
Capital reserve 632,142 706,238 621,869
Revenue reserve 54,072 59,099 49,506
Total equity shareholders’ funds 692,505 771,628 677,666
Net asset value per Participating 11 $15.55 $11.99 $9.77
Preference Share
Statement of Cash Flows
for the six months ended
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2025 2024 2025
unaudited unaudited audited
$’000 $’000 $’000
Operating activities
Cash inflows from dividend income from 10,400 10,699 21,955
investments*
Cash inflows from interest income from cash 510 361 633
and collateral*
Cash inflows from dividend income from 6,612 10,979 14,390
derivatives*
Cash inflows from interest income from 342 740 1,166
derivatives*
Cash outflow from taxation paid (1,171) (1,096) (4,407)
Cash outflow from the purchase of investments (430,800) (372,144) (746,980)
Cash inflow from the sale of investments 663,796 417,342 804,105
Cash inflow from net proceeds from settlement 28,294 5,809 57,520
of derivatives
Cash inflow/(outflow) from amounts held at 5,532 76 (7,569)
futures clearing houses and brokers
Cash outflow from operating expenses (3,105) (3,194) (6,262)
Net cash inflow from operating activities 280,410 69,572 134,551
Financing activities
Cash outflow from CFD interest paid (633) (10,675) (19,611)
Cash outflow from short CFD dividends paid (11,627) (1,280) (3,011)
Cash outflow from dividends paid to (12,338) (14,103) (14,103)
shareholders
Cash outflow from repurchase of Participating (1,048) (49,449) (95,594)
Preference Shares into Treasury
Cash outflow from repurchase and cancellation (237,002) – –
of Participating Preference Shares
Cash outflow from repurchase and cancellation (1,075) – –
buyback expenses
Net cash outflow from financing activities (263,723) (75,507) (132,319)
Net increase/(decrease) in cash at bank 16,687 (5,935) 2,232
Cash at bank at the start of the period 9,551 8,794 8,794
Effect of foreign exchange movements (2,272) (1,108) (1,475)
Cash at bank at the end of the period 23,966 1,751 9,551
* Comparatives for six months ended
Notes to the Financial Statements
for the six months ended
1. Principal Activity
The Company’s registered office is at Level 3, Mill Court La Charroterie,
The Company’s investment objective is to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging market companies, both listed and unlisted.
2. Publication of Non-statutory Accounts
The Financial Statements in this Half Year Report have not been audited by the Company’s Independent Auditor. The financial information for the year ended
3. Accounting Policies
(i) Basis of Preparation
These Half Year Financial Statements have been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’. The interim financial statements should be read in conjunction with the Company’s Annual Report and Financial Statements for the year ended
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.
(ii) Going Concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these Financial Statements. In making their assessment the Directors have reviewed the income and expense projections, the liquidity of the investment portfolio, stress testing performed and considered the Company’s ability to meet liabilities as they fall due. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements.
4. Income
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
$’000
$’000 $’000
Investment income
UK dividends 1,115 367 619
Overseas dividends 7,743 9,758 22,320
Interest on bonds – 2 2
8,858 10,127 22,941
Derivative income
Dividends received on long CFDs 4,587 9,504 14,964
Interest received on CFDs 360 740 1,166
Option income 6,835 5,586 10,725
11,782 15,830 26,855
Other income
Interest income from cash and cash 510 361 631
equivalents and collateral
Total income 21,150 26,318 50,427
Special dividends of
5. Management Fees
Revenue Capital Total
$’000 $’000 $’000
Six months ended 31 December 2025 (unaudited)
Management fees 467 1,868 2,335
Six months ended 31 December 2024 (unaudited)
Management fees 447 1,789 2,236
Year ended 30 June 2025 (audited)
Management fees 863 3,451 4,314
FII charges a management fee of 0.60% per annum of the Net Asset Value of the Company. Fees are payable monthly in arrears and calculated on a daily basis. Management fees have been allocated 80% to capital reserve in accordance with the Company’s accounting policies.
Management fees incurred by collective investment schemes or investment companies managed or advised by the Investment Manager are reimbursed.
6. Finance Costs
Revenue Capital Total
$’000 $’000 $’000
Six months ended 31 December 2025 (unaudited)
Dividends paid on short CFDs 664 – 664
Interest paid on CFDs 10,630 – 10,630
11,294 – 11,294
Six months ended 31 December 2024 (unaudited)
Dividends paid on short CFDs 975 – 975
Interest paid on CFDs 10,697 – 10,697
11,672 – 11,672
Year ended 30 June 2025 (audited)
Dividends paid on short CFDs 3,506 – 3,506
Interest paid on CFDs 20,198 – 20,198
23,704 – 23,704
7. Earnings/(Loss) per Participating Preference Share
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
Revenue earnings per Participating Preference $0.12 $0.17 $0.31
Share
Capital earnings/(loss) per Participating $2.79 ($0.37 ) $1.52
Preference Share
Total earnings/(loss) per Participating $2.91 ($0.20 ) $1.83
Preference Share (basic and diluted)
The earnings/(loss) per Participating Preference Share is based on the profit/(loss) after taxation for the period divided by the weighted average number of Participating Preference Shares in issue during the period, as shown below:
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
$’000
$’000 $’000
Revenue profit after taxation for the period 7,311 12,276 21,869
Capital profit/(loss) after taxation for the 164,257 (26,445) 105,117
period
Total profit/(loss) after taxation for the 171,568 (14,169) 126,986
period
Number Number Number
Weighted average number of Participating 58,911,403 71,877,832 69,485,764
Preference Shares held outside of Treasury
8. Dividend Paid to Shareholders
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
$’000
$’000 $’000
Dividend Paid
Dividend of 26.00 cents pence per ordinary 12,338 – –
share paid for the year ended 30 June 2025
Dividend of 20.00 cents pence per ordinary – 14,103 14,103
share paid for the year ended 30 June 2024
No dividend has been declared in respect of the six months ended
9. Share Capital
31 December 31 December
30 June 2025
2025 2024
Number of
Number of Number of
audited
unaudited unaudited
shares
shares shares
Authorised
Founder shares of no par value 1,000 1,000 1,000
Issued
Participating Preference Shares held
outside Treasury
Beginning of the period 64,342,245 74,646,287 74,646,287
Participating Preference Shares (3,378,107) – –
repurchased and cancelled
Participating Preference Shares
repurchased and cancelled for Strathclyde (16,441,177) – –
Pension Fund
Participating Preference Shares – (5,311,585) (10,304,042)
repurchased into Treasury
End of the period 44,522,961 69,334,702 64,342,245
Participating Preference Shares held in
Treasury *
Beginning of the period 13,225,940 2,921,898 2,921,898
Participating Preference Shares – 5,311,585 10,304,042
repurchased into Treasury
Cancellation of Participating Preference (4,200,000) – –
Shares in Treasury
End of the period 9,025,940 8,233,483 13,225,940
Total Participating Preference Shares 53,548,901 77,568,185 77,568,185
*
The Participating Preference Shares held in
The Board of Directors is mindful that the Company’s shares have traded at a discount to NAV for some time, and frequently deliberates appropriate discount control mechanisms to address the imbalance between the demand and supply of the Company’s shares. The Board intends to continue using its buyback programme to address the discount to NAV with the ambition that it may ultimately be maintained in single digits in normal market conditions on a sustainable basis.
The costs associated with the repurchase of the shares of
The Company may issue an unlimited number of Shares of no par value.
Founder Shares
The Founder Shares were issued at
At the Extraordinary General Meeting of the Company on
The Founder Shares confer no rights upon holders other than at general meetings, on a poll, every holder is entitled to one vote in respect of each Founder Share held.
10. Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.
Classification Input
Level 1 Valued using quoted prices in active markets for identical assets
Valued by reference to inputs other than quoted prices included
Level 2 in level 1 that are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly
Level 3 Valued by reference to valuation techniques using inputs that are
not based on observable market data
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The table below sets out the Company’s fair value hierarchy:
Level 1 Level 2 Level 3 Total
31 December 2025 (unaudited)
$’000 $’000 $’000 $’000
Financial assets at fair value through profit or
loss
Investments in equity securities 607,395 – – 607,395
Investee funds – – 4,377 4,377
Derivative instrument assets – Futures contracts 2,392 – – 2,392
Derivative instrument assets – Options 2,080 – – 2,080
Derivative instrument assets – CFDs – 15,110 – 15,110
Derivative instrument assets – forward currency – 205 – 205
contracts
611,867 15,315 4,377 631,559
Financial liabilities at fair value through
profit or loss
Derivative instrument liabilities – Futures 2,567 – – 2,567
contracts
Derivative instrument liabilities – Options 2,736 170 – 2,906
Derivative instrument liabilities – CFDs – 6,139 – 6,139
5,303 6,309 – 11,612
Level 1 Level 2 Level 3 Total
30 June 2025 (audited)
$’000 $’000 $’000 $’000
Financial assets at fair value through profit or
loss
Investments in equity securities 708,476 – – 708,476
Investee funds – – 4,385 4,385
Derivative instrument assets – Futures contracts 342 – – 342
Derivative instrument assets – Options 3,846 98 – 3,944
Derivative instrument assets – CFDs – 10,649 – 10,649
Derivative instrument assets – forward currency – 71 – 71
contracts
712,664 10,818 4,385 727,867
Financial liabilities at fair value through
profit or loss
Derivative instrument liabilities – Futures 4,137 – – 4,137
contracts
Derivative instrument liabilities – Options 1,802 630 – 2,432
Derivative instrument liabilities – CFDs – 9,215 – 9,215
5,939 9,845 – 15,784
Level 1 Level 2 Level 3 Total
31 December 2024 (unaudited)
$’000 $’000 $’000 $’000
Financial assets at fair value through profit or
loss
Investments in equity securities 621,157 – – 621,157
Equity linked notes – 6,377 – 6,377
Investee funds – – 4,477 4,477
Derivative instrument assets – Futures contracts 7,257 – – 7,257
Derivative instrument assets – Options 1,178 90 – 1,268
Derivative instrument assets – CFDs – 4,830 – 4,830
Derivative instrument assets – forward currency – 629 – 629
contracts
629,592 11,926 4,477 645,995
Financial liabilities at fair value through
profit or loss
Derivative instrument liabilities – Futures 351 – – 351
contracts
Derivative instrument liabilities – Options 1,262 448 – 1,710
Derivative instrument liabilities – CFDs – 11,599 – 11,599
1,613 12,047 – 13,660
As the key input into the valuation of Level 3 investments is official valuation statements from the
The following table summarises the change in value associated with Level 3 financial instruments carried at fair value for the six months ended
31December 30 June 31 December
2025 2025 2024
$’000 $’000 $’000
Opening balance 4,385 5,363 5,363
Sales (323) (1,138) (1,057)
Transfer to Level 1 – (1,466) –
Realised gains/(losses) 296 (7,589) (9,105)
Net change in unrealised gains 19 9,215 9,276
Closing balance 4,377 4,385 4,477
The Company’s holdings in Russian securities have been fair valued at nil as at
The Company’s policy is to recognise transfers in and transfers out at the end of each accounting year.
11. Net Asset Value per Participating Preference Share
31December 30 June 31 December
2025 2025 2024
unaudited audited unaudited
Net assets $692,505,000 $771,628,000 $677,666,000
Participating Preference Shares held 44,522,961 64,342,245 69,334,702
outside of Treasury
Net asset value per Participating $15.55 $11.99 $9.77
Preference Share
12. Transactions with the Manager and Related Parties
Details of the current fee arrangements are given in Note 5.
During the period, the Company had the following transactions payable to FII:
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
$’000
$’000 $’000
Investment management fees 2,335 2,236 4,314
Marketing services 170 84 334
At the Statement of Financial Position date, the following balances payable to FII and other payables were accrued and included in other creditors:
Six months Six months
Year ended
ended ended
30 June
31 December 31 December
2025
2025 2024
audited
unaudited unaudited
$’000
$’000 $’000
Investment management fees 338 365 348
Marketing services 21 43 11
At the date of this report, the Board consisted of five non-executive Directors (as shown below) all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company.
The annual fee structure with effect from
1 July
2025
£
Chairman 60,000
Chair of the Audit and Risk Committee 45,000
Senior Independent Director 42,000
Director 40,000
Directors’ Shareholdings:
31 December
2025
unaudited
Heather Manners 10,000
Torsten Koster 15,000
Katherine Tsang 8,000
Dr Simon Colson 4,416
Mark Little 2,850
13. Subsequent Events
Post interim, the valuation of the Company’s holding in NCH Balkan was reassessed. The updated
valuation of
Additional Information
Board of Directors
Dr
Registered Office
Level 3, Mill Court La Charroterie
Website
www.fidelity.co.uk/emergingmarkets
The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts. The financial information for the six months ended
The information for the year ended
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM
The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/emergingmarkets where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.
END
