Global Emerging Markets

Built beyond the benchmark

Focusing on quality

With more than three decades of experience investing in emerging markets, we’ve witnessed some of the biggest growth stories take shape.

While many investors see high trading volumes and rapid portfolio turnover as evidence of constant re-evaluation and attention to detail, at FSSA we favour a patient, long-term approach, only investing in companies where we have high conviction. Our experience has taught us that focusing on quality – and taking an active, bottom-up approach to stock selection – is key to finding the long-term winners.

The case for emerging markets

The global economy is increasingly being driven by emerging markets growth. We expect this trend to accelerate in the coming years. Emerging markets have historically been quite a good diversifier; and there is a broad collection of very diverse countries within the markets.

China: Growing middle class

Taiwan: Forefront of Artificial Intelligence

Mexico: Formalisation of the economy

India: Early stages of financialisation

Benefitting from shifting global dynamics

With shifting dynamics in global markets, and US stocks trading at historical highs, emerging markets appear undervalued in comparison. According to the Buffet indicator, which measures the ratio of stock market capitalisation to gross domestic product (GDP), the US is significantly overvalued at 200%. China on the other hand, is undervalued by this measure at approximately 80% , while Latin America and most Asian countries (with the exception of Taiwan and India), are around 50%.

This presents an attractive opportunity to build exposure to emerging markets, especially for long-term investors who are seeking diversification.

Source: FT, Bloomberg, April 2025

Limiting exposure to global headwinds

A large proportion of the companies in our portfolio are driven by domestic demand. This can offer significant protection against the uncertainties of tariffs and trade wars. In our experience, the factors that underpin domestic demand – such as low market penetration rates, premiumisation and import substitution – are more predictable than global market forces.

Uncertainties around US trade policy undoubtedly have the potential to disrupt emerging markets in the months and years ahead – but our portfolio of businesses with strong domestic franchises and relatively low exposure to international markets should help us be able to weather the storm.

FSSA GEM Focus strategy top 10 holdings

Click on a circle to discover the top holdings

Source: FSSA as at 30 June 2025

We hold all-weather characteristics

During periods of market turbulence, our long-term approach – and our focus on company fundamentals – stands out for its all-weather characteristics. Since inception, we have successfully navigated challenging market conditions to deliver positive returns over each rolling 5-year period – even when the index return is negative.

Delivering positive returns in turbulent market conditions

12-month rolling discrete periods to:
	31 Dec 2025	31 Dec 2024	31 Dec 2023	31 Dec 2022	31 Dec 2021
FSSA Global Emerging Markets Focus composite (%)	23.4	10.7	6.3	-9	-2.3
MSCI EM Index (%)	34.4	8.1	10.3	-19.7	-2.2

12-month rolling discrete periods to:

FSSA Global Emerging Markets Focus composite (%)

31 Dec 2025: 23.4
31 Dec 2024: 10.7
31 Dec 2023: 6.3
31 Dec 2022: -9
31 Dec 2021: -2.3

MSCI EM Index (%)

31 Dec 2025: 34.4
31 Dec 2024: 8.1
31 Dec 2023: 10.3
31 Dec 2022: -19.7
31 Dec 2021: -2.2

Past performance is not a reliable indicator of future performance.

Source: FSSA Global Emerging Markets Focus composite

Source for composite performance: First Sentier Investors as at 31 Dec 2025. Composite performance is shown on a net of fees basis. Net performance figures are calculated by subtracting a model annual management fee of 0.85% from the gross performance figures. For investors based in countries with currencies other than USD, the return may increase or decrease as a result of currency fluctuations. No other expenses or costs have been taken into account when calculating the net performance. This information is provided for illustrative purposes to demonstrate our activity within the strategy for the periods shown. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between fund or client-specific constraints and those of a similarly managed mandate would affect results. Source for MSCI EM index: FactSet, total returns, gross of tax. Since launch performance calculated from 30/11/2017.

Our insights

Discover how we focus on management quality, what we’ve learned from our decades of experience in emerging markets, and why we believe face-to-face beats AI, every time.

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