FIDELITY
EMERGING
MARKETS
LIMITED
Annual Report for the year ended 30 June 2026
To find out more, visit fidelity.co.uk/emergingmarkets,
scantheQRcodeorspeaktoyouradviser.
FIDELITY EMERGING MARKETS LIMITED
Whether it’s in South African mining, Indian financial
servicesorChineseinfrastructure,weknowwhereto
find opportunities hidden within emerging markets.
Fidelity Emerging Markets Limited uncovers great
companies through our experienced global team,
backedbywhatwebelieveareunrivalledon-the-
ground research capabilities. Meaning you can make
themostofourextensiveexpertise,withoutlearning
a whole new language.
Thevalueofinvestmentscangodownaswellasup,
soyoumaygetbacklessthanyouinvest.Overseas
investments are subject to currency fluctuations.
Investments in emerging markets can be more volatile
than other more developed markets. The Company
uses financial derivative instruments for investment
purposes,whichmayexposeittoahigherdegreeof
risk and can cause investments to experience larger
than average price fluctuations.
We speak
the language
of opportunity
– wherever it
emerges
籫氳
☲全┘佭儬⚡
Ithuba
Elingavinjelwe
The latest annual reports, key information document (KID) and factsheets can be obtained from our website at www.fidelity.co.uk/its or by calling
0800414110. The Alternative Investment Fund Manager (AIFM) of Fidelity Investment Trusts is FIL Investment Services (UK) Limited. Issued by
Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity, Fidelity International, the Fidelity
International logo and F symbol are trademarks of FIL Limited. UKM0123/381013/SSO/0623
Fidelity Emerging Markets Limited | Annual Report 2026
The Year at a Glance
As at 30 June 2026
Equity Shareholders’ Funds
£651.0m / $864.0m
Market Capitalisation
£602.4m / $799.5m
Total Voting Rights
Number of Participating Preference Shares held outside of
Treasury and voting rights of Founder Shares.
39,373,155
Summary of the key aspects of the
Investment Policy
The Company aims to achieve long term capital growth by
investing in a diversified portfolio of equity or equity-linked
securities and derivative instruments providing exposure to
emerging market companies.
The Investment Manager invests at least 80% in companies with
head offices, listings, assets, operations, income, or revenues
predominantly in or derived from emerging markets.
A diversified portfolio of at least 75 holdings in companies listed
or operating in at least 15countries is maintained.
The Company may also invest into other transferable securities,
investment companies, money market instruments, unlisted shares,
cash and deposits within the limits of the investment policy
restrictions as detailed on pages 20 and 21. It is able to use
derivatives for efficient portfolio management, to gain additional
market exposure (gearing), to seek a positive return from falling
asset prices, and for other investment purposes.
Net Asset Value per Participating
Preference Share total return
1,2
Year ended 30 June
MSCI Emerging Markets Index total return
1,3
Year ended 30 June
Active Share
2
Year ended 30 June
Source: JPMorgan and Datastream.
1 Includes reinvested income.
2 Alternative Performance Measure – refer to Glossary of Terms on pages 87 to 89.
3 The Company’s Benchmark Index.
In the reporting year, the Company’s Net Asset Value per Participating Preference Share increased by
92.3% and the Share Price increased by 99.3%, whilst the Benchmark Index return increased by 48.2%
(allperformance data on a total return basis).
2026
2025
2024
2023
2022
+18.7%
+11.8%
-2.6%
-27.9%
+92.3%
2026
2025
2024
2023
2022
+6.3%
+13.2%
-14.9%
-2.8%
+48.2%
2026
2025
2024
2023
2022
+119%
+130%
+119%
+123%
+111%
Share Price total return
1,2
Year ended 30 June
2026
2025
2024
2023
2022
+22.6%
+14.0%
-5.2%
+99.3%
-30.0%
To find out more, visit fidelity.co.uk/emergingmarkets,
scantheQRcodeorspeaktoyouradviser.
FIDELITY EMERGING MARKETS LIMITED
Whether it’s in South African mining, Indian financial
servicesorChineseinfrastructure,weknowwhereto
find opportunities hidden within emerging markets.
Fidelity Emerging Markets Limited uncovers great
companies through our experienced global team,
backedbywhatwebelieveareunrivalledon-the-
ground research capabilities. Meaning you can make
themostofourextensiveexpertise,withoutlearning
a whole new language.
Thevalueofinvestmentscangodownaswellasup,
soyoumaygetbacklessthanyouinvest.Overseas
investments are subject to currency fluctuations.
Investments in emerging markets can be more volatile
than other more developed markets. The Company
uses financial derivative instruments for investment
purposes,whichmayexposeittoahigherdegreeof
risk and can cause investments to experience larger
than average price fluctuations.
We speak
the language
of opportunity
– wherever it
emerges
籫氳
☲全┘佭儬⚡
Ithuba
Elingavinjelwe
Financial Highlights
30 June
2026
30 June
2025
Assets as at 30 June
USD
Gross Asset Exposure
1
$1,386.1m $1,235.3m
Equity Shareholders’ Funds $864.0m $771.6m
NAV per Participating Preference Share
2
$21.94 $11.99
Dividend per Participating Preference Share $0.33 $0.26
Dividend Yield 1.6% 2.4%
Gross Gearing
2,3
60.4% 60.1%
Net Gearing
2,4
8.8% 5.5%
Exchange Rate (USD to GBP) 1.33 1.37
GBP
Gross Asset Exposure
1,5
£1,044.3m £901.4m
Equity Shareholders’ Funds
5
£651.0m £563.1m
NAV per Participating Preference Share
2,5
£16.53 £8.75
Share Price and Discount as at 30 June
Participating Preference Share Price £15.30 £7.83
Discount to NAV per Participating Preference Share 7.4% 10.5%
Number of Participating Preference Shares held outside Treasury 39,373,154 64,342,245
Earnings for the year ended 30 June
Revenue Earnings per Participating Preference Share
6
$0.32 $0.31
Capital Earnings per Participating Preference Share
6
$8.23 $1.52
Total Earnings per Participating Preference Share
6
$8.55 $1.83
Ongoing charges ratio
2
0.87% 0.83%
1 The value of the portfolio exposed to market price movements.
2 Alternative Performance Measure – refer to page 79 and Glossary of Terms on pages 87 to 89.
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 year.
Annual Total Returns in GBP to 30 June 2026 (%)
1 year ended 30 June 2026 3 years ended 30 June 2026 5 years ended 30 June 2026
Share Price NAV (net of annual fees) MSCI Emerging Markets Index
+36.7
+40.7
+21.3
+13.1
+12.4
+8.1
+48.2
+92.3
+99.3
01
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS
Contents
Strategy
Chairman‘s Statement 2
Portfolio Managers’ Review 5
Investment Toolkit 9
Spotlight on Top 10 holdings 10
Forty Largest Holdings 12
Distribution of the Portfolio 15
Attribution Analysis 17
Five Year Record 18
Strategic Report 19
Investment strategy and policies 20
Principal and Emerging Risks and Uncertainties,
Risk Management 22
Viability statement 26
Governance
Board of Directors 29
Directors‘ Report 31
Corporate Governance Statement 33
Directors‘ Remuneration Report 38
Statement of Directors‘ Responsibilities 39
Report of the Audit and Risk Committee 40
Nomination Committee‘s Report 42
Financial
Independent Auditor‘s Report 43
Statement of Comprehensive Income 47
Statement of Changes in Equity 48
Statement of Financial Position 49
Statement of Cash Flows 50
Notes to the Financial Statements 51
Alternative Performance Measures 79
Securities Financing Transactions Regulation (“SFTR”) 80
Information for Shareholders
Notice of Annual General Meeting 81
Administration 83
Data Protection 84
Alternative Investment Fund Manager‘s Disclosure 85
Glossary to the Annual Report 87
Chairman’s Statement
Read more on pages 2 to 4
Portfolio Managers’ Review
Read more on pages 5 to 8
Net Asset Value per Share
as at 30 June
£16.53
£8.75
2026
£7.98
2025
2024
Share Price
as at 30 June
£15.30
£7.83
2026
£7.03
2025
2024
02
Fidelity Emerging Markets Limited | Annual Report 2026
Chairman‘s Statement
“ During the 12-month period
to 30 June 2026, the
Company’s NAV total return
was 92.3% in GBP terms,
compared with 48.2% for the
Index. The share price total
return was 99.3% – effectively
doubling investors’ money.”
Heather Manners, Chairman
I am pleased to present your Company’s 37th annual report. As we
reach the fifth anniversary of Fidelity’s appointment as manager, it
is gratifying to be able to report a fourth successive year in which
Fidelity Emerging Markets Limited (‘the Company’)’s net asset value
(‘NAV’) total returns have beaten the Company’s benchmark, the MSCI
Emerging Markets Total Return Index (‘the Index’), and a third year of
strong absolute returns in both the NAV and the share price. While NAV
performance can be seen as the best measure of a fund manager’s
skill, the share price arguably represents investors’ recognition of that
skill. Your Board and I are delighted that the Company’s share price
total return has outperformed its NAV total return for a third year in a
row, with both outperforming the Index. 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. 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. In fact,
performance has been so strong that your Company ranked in the top
10 of all investment trusts (over 200 of them) for NAV and share price
total return performance over both one and three years to 30 June 2026,
ahead of all peers in the Association of Investment Companies’ (AIC)
Global Emerging Markets sector.
Overview
During the 12-month period to 30 June 2026, the Company’s NAV total
return was 92.3% in GBP terms, compared with 48.2% for the Index.
The share price total return was 99.3% – effectively doubling investors’
money – while the discount to NAV narrowed from 10.5% at the
beginning of the period to 7.4% at the end, spending most of the year in
single figures. Performance was strong across the whole period, despite
continued geopolitical tensions, including the war in Iran, which has put
considerable upward pressure on energy prices – and inflation more
broadly – throughout much of the world.
I noted in my Chairman’s Statement in last year’s annual report that
sentiment towards emerging markets appeared to have turned a
corner after a long period in which US equities had been preeminent.
Thereturn from the Index in the period under review is further evidence
of this; indeed, it is roughly double the 25.8% total return of the S&P
500 index (Net Total Return, GBP), the main US benchmark. However,
Ifirmly believe that it would be wrong for investors to conclude that such
strong relative and absolute performance mean further upside is limited.
After18 years in a consolidation pattern, emerging markets are only just
stepping into the spotlight on the world stage, having played second
fiddle ever since the global financial crisis.
The magnitude of your Company’s outperformance in the year under
review is testament both to the Portfolio Managers’ skill in stock picking
and their full deployment of the broad investment toolkit available to
them. (For a full explanation of the toolkit, please see page 9 of this
report.) It is particularly notable that in a strongly positive year for the
market as a whole, the short positions in the portfolio still added value,
accounting for around a quarter of the excess return versus the Index.
Yield enhancement strategies (selling Options to generate income)
and the allocation to small- and mid-sized companies – anotable
differentiating factor versus peers – also contributed. The ability to take
such positions is a key advantage of the closed-end structure, while the
execution of the strategy is greatly facilitated by the research efforts of
Fidelity’s large team of locally based emerging markets analysts, as
well as derivatives and risk management specialists.
+92.3%
Net Asset Value per Participating
Preference Share total return
(Year ended 30 June 2026)
+99.3%
Share Price total return
(Year ended 30 June 2026)
+48.2%
MSCI Emerging Markets Index total return
(Year ended 30 June 2026)
03
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
The portfolio continues to include Russian assets which are
currently valued at zero given the inability to trade them. Any
future resolution of the conflict and relaxation of applicable
sanctions could therefore provide an uplift to NAV if those assets
were able to recover realisable value. Further details can be
found on page76.
The Portfolio Managers’ report on the following pages contains
a wealth of detail on the contributors to absolute and relative
performance in the period under review. However, I would draw
attention particularly to the very high active share (a measure of
how much the portfolio differs from the Index) and the skill with
which the team has managed volatility in semiconductors. With
the rapid development of artificial intelligence (‘AI’) technologies
continuing to dominate the headlines, having appropriate
exposure to large index constituents such as Korea’s SK Hynix
and Taiwan Semiconductor Manufacturing Company has been
essential. Yet AI, with its associated need for large-volume data
storage and power, isnot just a technology story; it is also a
resources story, and your Portfolio Managers’ stock picking
within the materials and industrials sectors has also contributed
steadily to returns while the majority of investors have been more
narrowly focused on IT.
Due diligence trip
In April 2026, your Board was fortunate to have the opportunity
to visit Hong Kong and China with Fidelity’s team. In September
2025, Nick Price relocated from London to Hong Kong, which
is a hub for Fidelity International’s activity in Asia. With Asia
representing around 80% of the emerging markets universe by
market capitalisation, it is an important part of the opportunity
set, and it was good to see Nick in his new home and meet the
large team of locally based analysts. During the trip, we were
able to see the investment team working together, and to hear
from them and some of the Company’s key holdings about their
confidence in the future. We also had an extensive meeting with
the risk management team – the largest outside the UK – and
were both encouraged and reassured by the robustness and
highly detailed nature of their processes.
Dividend
The Board is recommending a final dividend of $0.33 per
Participating Preference Share for the year ended 30 June 2026
(2025: $0.26) for approval by shareholders at the Annual General
Meeting (‘AGM’) to be held on 1 December 2026. As ever,
Iwould highlight that the Board does not have a fixed dividend
policy, because income is an output rather than an aim of the
investment process, and therefore no guarantee can be offered
as to the level of any future dividends.
Board composition
As noted in the half-year report, Katherine Tsang completed nine
years’ service (the recommended maximum under the AIC Code
of Corporate Governance) in July 2026, and as such she intends
to stand down at the 2026 AGM. A search has been completed
to find a suitably qualified individual to succeed her, the Board is
pleased to announce the appointment of Dr Shefaly Yogendra and
a separate announcement in relation to this appointment will be
made shortly. There have been no other changes to the Board of
Directors in the period under review.
Discount management
The discount to NAV narrowed during the year, beginning at
10.5% and ending at 7.4%, as noted above. After narrowing
steadily between July and October 2025 to around 6%, the
discount remained broadly between 5% and 10% for the
remainder of the period.
The Board remains committed to using share repurchases to help
reduce the volatility of discount to NAV. Any share repurchases
are completed at prices, which are accretive to NAV for ongoing
shareholders. During the year under review, we bought back
8,527,914 shares in the market (excluding the c.25% of shares in
issue repurchased from Strathclyde Pension Fund in November
2025), representing 13.2% of shares in issue at the start of the
period. At the AGM on 1 December 2026, we will seek to renew
the existing annual authority to repurchase up to 14.99% of our
Participating Preference Shares.
It is gratifying that although the pace of regular buybacks has
remained virtually unchanged compared with the previous year,
strong performance has meant that total assets and market
capitalisation have both risen substantially. This greater scale
supports liquidity and helps maintain the Company’s relevance to
wealth managers and other investors for whom market liquidity
is an important consideration. Fidelity has also seen increased
engagement from wealth managers during the year.
We are pleased to be a popular choice among retail investors.
Retail investors represented 18.2% of the shareholder base on
30 June 2026, compared with 4.1% on 30 June 2025, and the
Company featured on several investment trust best-selling lists
during the period. The Board welcomes this broadening of
the shareholder base and the increased participation of retail
investors. Fidelity has continued to raise the Company’s profile
through its marketing, media, social media and distribution
activity. The Board will continue to support activity aimed at
attracting new investors, broadening demand for the Company’s
shares and, over time, supporting a narrower discount.
Extraordinary General Meetings
The Company held two Extraordinary General Meetings during
the financial year. The first, in October 2025, approved the
Strathclyde Repurchase, which was covered in detail in last year’s
Chairman’s Statement. The repurchase increased NAV per share
by approximately 4.5%.
The second EGM was held in May 2026 after 63% of the share
buyback authority granted at the 2025 AGM had been used.
Shareholders approved a renewed authority to repurchase up to
6,201,500 shares, representing 14.99% of the shares in issue at
the latest practicable date. The resolution was approved by 100%
of votes cast, on a turnout of 71%.
04
Fidelity Emerging Markets Limited | Annual Report 2026
Chairman‘s Statement continued
Annual General Meeting
This year’s AGM will be held on 1 December 2026 at 8:30a.m.
at the registered office of the Company, Level 3, Mill Court,
LaCharroterie, St Peter Port, Guernsey GY1 1EJ. The Notice of the
AGM, containing full details of the business to be conducted at
the meeting, is set out on page 81 of this report. Your attention is
also drawn to the Corporate Governance section of the Directors’
Report on page 34 where resolutions relating to special business
are explained. Electronic proxy voting is now available and
shareholders are encouraged to submit voting instructions using
the web-based voting facility at www.eproxyappointment.com
and for institutional shareholders via the CREST system, CREST
messages must be received by the issuer’s agent (ID number
3RA50) not later than 8:30a.m. on 29November 2026. In
order to use electronic proxy voting, shareholders will require
their shareholder registration number, control number and PIN.
Ifyou do not have access to these details please contact the
Company’s Registrar, Computershare; their contact details can be
found on page 83 of this report.
Articles of Incorporation
The Board is proposing to replace article 17 of the articles of
incorporation relating to the determination of net asset value
and the definition of the “Valuation Day”. These changes
simplify these provisions and will allow the Directors to make
amendments to the timing and methodology of determining
the net asset value without updating the articles. They will allow
the timing to be regularised with the UK time zone to make the
process of determining and reporting more efficient. However,
it is intended to continue to release the net asset value on
a daily basis and there is no current intention to change the
methodology for the calculation.
A full tracked version of all the changes proposed to the
Articles is available at https://investment-trusts.fidelity.co.uk/
fidelity-emerging-markets. The principal changes proposed to
the Articles are set out in more detail in the Directors’ Report on
page34.
Outlook
One of the relative headwinds facing emerging markets in
recent years has been investor appetite, which has been far
more focused on developed markets, most particularly the
US. While in the long-term stock market performance is driven
mainly by corporate earnings, in the short term it may be driven
by momentum, as the weight of money pushes share prices up
(or down). However, to anyone suspecting that they may have
missed the boat after such a stellar year for your Company and
its investment universe, I would point out two things. First, UK
investors have in fact continued to pull money out of emerging
markets funds in aggregate during the year under review:
figures from the Investment Association (the industry body for UK
investment managers) show that a net £882m was withdrawn
from global emerging markets funds between July2025 and
June 2026, despite six months of positive net flows between
October and March. Meanwhile, the North America sector
(whichis overwhelmingly US rather than Canada) saw net
inflows of over £500m. Despite the net outflows from emerging
markets, your Board remains confident that emerging markets
are at the foothills of what can be achieved over the coming
years. The second thing is that emerging markets as a group are
on a far sounder economic footing than most large developed
markets, which are beset by geopolitical tensions, groaning
under the weight of enormous government debt and battling
food and energy price inflation, all of this while struggling to
generate meaningful economic growth or productivity gains.
While developed markets are still reaping the whirlwind of
Covid-era stimulus, emerging markets have gone through the
economic pain of the pandemic and are leaner, fitter and more
self-sufficient as a result. So even after a standout year in the
markets, I would venture that the best is yet to come from the
huge and diverse opportunity set in which your Companyinvests.
It is, however, an inescapable truth that markets can go down
as well as up. This is one of the reasons why Nick, Chris and
the team deploy such a broad set of tools, including the ability
to take short positions, as well as ensuring that the Company’s
holdings are well diversified across countries, themes and
sectors. The resulting portfolio looks genuinely different from
the majority of peers and is arguably better positioned to offer
a degree of downside protection should a period of market
consolidation or retrenchmentoccur.
Following the five-year performance conditional tender offer
calculation date on 30 September 2026, I can confirm that the
Company’s NAV total return outperformed the Index over the
relevant five-year period and, as a result, the 25% tender offer
will not proceed. It is pleasing to see this result and the sustained
performance, discipline and rigour of the investment process over
a longer performance period. Your Board plans to renew the
conditional tender offer on the same terms. The new five year
review period will be 1 July 2026 to 30 June 2031, this period
has been adjusted slightly to align with the Company’s financial
yearend.
The Company has committed to hold a continuation vote every
five years. This allows shareholders the opportunity to decide
on the long-term future of the Company. The next continuation
vote will take place at this year’s AGM on Tuesday, 1 December
2026. Given the strong performance of the Company your Board
unanimously recommends that shareholders vote in favour
ofcontinuation.
Heather Manners
Chairman
5 October 2026
05
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Portfolio Managers’ Review
Question
How did the Company perform over the
year to 30 June 2026, and how should
shareholders assess performance
over the full period since Fidelity’s
appointment?
Answer
The investment company delivered strong results over the year,
generating a NAV total return of 92.3% vs the Index which
returned 48.2%. It has been pleasing to see the Company’s
enhanced ‘toolkit’ add significant value over the period, with
positive contributions from the long and short books. The latter
contributed c.9% to active return, a notable outcome given the
strength of emerging markets over the period. Furthermore,
yield enhancement (selling options to generate income) and the
exposure to smaller companies added value. In addition to robust
investment performance, there was an uplift to the NAV per share
of approximately 4.5% following the repurchase of Strathclyde
Pension Fund’s holding in Q4 2025.
Over the full period since Fidelity’s appointment on 4 October
2021, similar trends can be seen – the investment company
has generated 14.8% NAV returns on an annualised basis,
outperforming the Index which returned 10.2%, supported by
strongstock picking and the portfolio’s enhanced investment
powers (including short positions, yield enhancement, and the
smaller capexposure).
Question
What were the principal drivers of
performance over the year?
Answer
At the sector level, Information Technology (IT) was a significant
contributor, reflecting both strong stock selection and portfolio
positioning during a period when optimism around the
beneficiaries of artificial intelligence (AI) investment was an
important driver of emerging market equities. Stock selection in
materials and industrials also contributed positively, while exposure
to financials detracted.
At the country level, Taiwan contributed positively through a
combination of stock selection and positioning, while lower
exposure to mainland China also added value, during a period
when the market lagged the wider index. Stock selection in Korea
was another positive contributor. Stock selection in South Africa and
exposure to Indonesia were the main detractors.
Nick Price was appointed
as Portfolio Manager of Fidelity
Emerging Markets Limited on
4 October 2021. He has 28 years
of investment experience.
Chris Tennant was appointed
as Portfolio Manager of Fidelity
Emerging Markets Limited on
4 October 2021. He has 15 years
of investment experience.
06
Fidelity Emerging Markets Limited | Annual Report 2026
At the stock level, the top contributor overall was the position in
SKSquare, the holding company for Korean memory chip producer
SK Hynix, which rallied on strong earnings expectations and as
demand for memory chips continued to exceed available supply.
Taiwan’s Elite Material, a producer of copper clad laminate,
aspecialist material used in printed circuit boards, also contributed
positively, supported by continued AI server-driven demand.
Elsewhere, several gold miners featured among top contributors,
including South African mid-cap Pan African Resources and
Brazil’s Aura Minerals, underpinned by strength in gold as strong
retail demand and a shift in central bank reserves away from
USTreasuries lifted prices in the latter half of 2025.
Key detractors included Naspers, the South African holding
company with a stake in China’s Tencent, which declined over
concerns that Tencent is falling behind peers in AI, although this
position was partly offset by the underweight exposure to Tencent
itself. Several positions in financials also featured among top
detractors, including Georgia’s TBC Bank, which suffered from
weakness in the Uzbekistan segment of the business, and Indian
SME lender Five Star Business Finance, which declined due to
concerns over weaker asset quality.
Question
What were the most significant portfolio
changes during the year, and what drove
those decisions?
Answer
Over the year, we increased exposure to technology. Here,
exposure has been focused on technology hardware companies
in Taiwan, such as Wiwynn, designer and manufacturer of servers,
and memory chip producers in Korea, where strong demand is
supporting rapid earnings growth. Notably, exposure was added
to high-conviction names in both markets following the outbreak of
the conflict in the Middle East in March, when we looked to take
advantage of the indiscriminate sell-off to build positions at more
attractive valuations.
Conversely, whilst we remain positive on the outlook for copper
and gold, we reduced our overweight to materials over the latter
half of the period as we looked to take profits in strong performers.
For example, the position in South African gold miner AngloGold
Ashanti was sold to reinvest the proceeds in companies with a
more attractive balance of potential return and risk.
We have also actively adjusted the portfolio’s China exposure
over the period. With weakness in the property sector continuing
to weigh on consumer confidence, we exited several consumer
holdings, such as sportswear brand Anta Sports, and reallocated
capital to industrial companies in areas such as batteries and
power equipment, where innovation is strong and many companies
are seeing rapid growth in export markets. One example is
Sinotruk, a leading manufacturer of heavy-duty trucks with around
26% domestic market share, which is experiencing strong export
growth in Africa.
Question
The Company has access to a broader
investment toolkit than its peers. How
did that flexibility help you capture
opportunities and manage risk during
theyear?
Answer
It has been a strong year for the short book, which contributed
~
9% to relative performance (excluding short index positions) over
the period. One area in which we have used short positions is the
materials sector, where we looked to capitalise on precious metal
miners whose valuations had risen sharply despite weak operating
performance or low-quality mining assets. This also allowed us
to manage the portfolio’s overall bet size within precious metals,
where the portfolio holds several high conviction long positions.
The Company’s additional flexibility also helped us to manage
risk during the year. For example, we bought call options
(which benefit from share prices increasing) on select oil and
gas producers following the outbreak of the conflict in the
Middle East, which allowed us to react nimbly to a changing
market environment and manage the portfolio’s underweight
exposuretooil.
Question
Fidelity’s global research capability
is an important part of the investment
proposition. Can you give examples
of how inputs from Fidelity’s research
analysts have helped build conviction?
Answer
The breadth and depth of Fidelity’s extensive research platform play
a critical role in helping us understand the wide range of emerging
market companies in which we can invest. We can draw on
specialist research across both emerging and developed markets,
as well as the expertise of our team of shorting analysts.
A key benefit of this platform is the ability to combine detailed
emerging market company research with insights into the developed
markets that influence demand. Within technology, for example,
we complement the work of our dedicated emerging market
analysts with inputs from Fidelity’s US technology analysts, helping
us assess the sustainability of AI investment – a critical driver of
our outlook on emerging market tech companies. The same can
be said for our view on key commodities. While our emerging
market mining analysts assess the prospects for individual copper
producers, for example, analysts covering EV, power grid and
technology companies help us build a broader view of long-term
copperdemand.
Portfolio Managers’ Review continued
07
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Fidelity’s extensive research resource also enables us to uncover
smaller companies ‘off the beaten track’, where limited research
coverage from brokers and investment banks can create greater
potential for mispricing, broadening the opportunity set. One
example is Orizon, a Brazilian waste management business which
operates in local monopolies with scope to benefit as the use of
formal landfill services increases.
Question
Travelling to meet companies across
Emerging Markets is a key part of the
investment process. How have insights
gleaned from travel influenced portfolio
positioning during the year?
Answer
We believe there is no substitute for meeting companies at their
headquarters, where we often gain additional insights not only from
meeting senior management but also from speaking with different
division heads or seeing a company’s assets first-hand. Travel is
therefore an important part of our investment process, and we have
made several trips across emerging market countries this year,
including to China, Taiwan, Korea and South Africa among other
markets. Each of these trips has influenced the portfolio in some
wayor another.
Our trip to South Africa, for example, resulted in a new position in
Capitec, a digital bank with robust earnings growth and scope
to further increase revenue from its large, growing user base. Our
meeting with the firm’s Head of Technology highlighted its continued
investment in fraud prevention and the strength of its technology
platform. Visiting individual branches also helped build conviction
in Capitec’s branch expansion strategy, with biometric verification
helping it operate branches more efficiently.
Similarly, our trip to Taiwan resulted in a new position in Unimicron,
the world’s largest manufacturer of ABF substrate, a specialist
material used in electronics. Our one-to-one meeting with
management gave us greater conviction in the AI-driven substrate
upcycle, supported by insights into the differentiated nature of the
current growth cycle, driven primarily by AI and high-performance
computing infrastructure, relative to less durable cycles we have seen
in the past, which have historically been driven by broad consumer
electronics demand.
Question
How have you positioned the portfolio to
benefit from the global investment cycle in
artificial intelligence?
Answer
AI is one of the key investment themes in the emerging market
opportunity set at the moment, and we have positioned the
portfolio to gain exposure to AI investment via several direct
beneficiaries, including hardware and memory chip producers.
Within memory chip producers, the portfolio has exposure to
Korean producers SK Hynix and Samsung Electronics (as well
as their holding companies SK Square and Samsung C&T) –
investment in AI and rising use of AI applications are driving
strong memory chip demand, which continues to outpace
supply, whilst barriers to entry remain high. Although today’s
exceptionally high earnings are unlikely to be sustained
indefinitely, the decommoditisation of memory and the shift
towards longer term contracts with pricing floors and ceilings
means the sector is becoming less cyclical than we have
seen historically, with significant visibility over pricing for the
nextfewyears.
The portfolio also has exposure to Taiwanese hardware
companies in the AI supply chain, where there are many high-
quality businesses operating in monopolistic market positions and
delivering strong revenue growth at more attractive valuations
than their US peers. One example is Accton, a manufacturer of
switches used to direct data traffic between chips in datacentre
racks, which benefits from stronger returns on assets and
margins than its US-listed counterpart Celestica, but trades at a
significantdiscount.
The portfolio is also well-positioned to benefit as AI adoption
broadens beyond the initial infrastructure buildout, with exposure
to potential beneficiaries such as Chinese internet platform
Tencent, whose broad distribution network should support the
rollout of AI tools to customers at relatively low cost. Conversely,
we are cognisant of the potential ‘AI losers’ within the market,
with scope to benefit from these companies via short positions.
For example, the Company is short several Asian IT services
companies, whose business models rely on lower labour costs
and could face disruption from AI.
08
Fidelity Emerging Markets Limited | Annual Report 2026
Portfolio Managers’ Review continued
Question
In which countries or sectors do you
see the most compelling opportunities
that are not yet fully appreciated by
themarket?
Answer
There are several markets which offer significant value in EM.
Indonesia is one example – political uncertainty and the threat of
an MSCI Indices downgrade from emerging market to frontier-
market status have driven a broad fall in valuations, leaving
high-quality consumer businesses trading on historically low
valuations. One name we hold is Alfamart, a mid-cap grocery
retailer operating in a duopoly, with a long runway for growth
given Indonesia’s low level of formal retail penetration.
We also see opportunity in Brazil. Political uncertainty and weak
fiscal discipline have driven a reduction in valuations, leaving
attractive stock picking opportunities among high-quality, well-
managed businesses, particularly within the mid-cap space. With
elections in October, the balance of potential risk and reward
looks attractive, with limited downside given low valuations.
At the sector level, there is value to be found in financials,
especially in smaller emerging market and frontier markets,
which are often too small to attract meaningful competition.
An example is mid-cap TBC Bank, a well-capitalised Georgian
bank operating in a duopoly, which trades on a mid-single
digit earnings multiple despite consistently attractive levels
ofprofitability.
Question
What has been the most important
lesson from the year, and how has it
strengthened the portfolio?
Answer
Market volatility over the year has reinforced our long-standing
conviction in the importance of a disciplined approach to
portfolio construction. We assign a target price to every stock in
the portfolio, with the potential return to that target helping us
assess risk-reward and inform position sizing, among other inputs.
This framework guided portfolio decisions throughout the year.
We added to high-conviction Korean and Taiwanese technology
holdings during periods of indiscriminate weakness, where the
potential return to our target prices increased, while trimming
select materials and technology names after strong performance
brought them closer to our assessment of fair value. This
discipline supported portfolio performance, allowing us to use a
particularly volatile period opportunistically and ensure capital
was continually reallocated towards the most attractive ideas.
We have also made continued thoughtful use of index hedging
to manage overall portfolio risk. While the opportunity set
among individual stocks remains rich, we have been mindful
of the residual market, country and sector exposures created
by our stock selection. As a result, while shareholders may see
meaningful gross positions in areas such as technology, index
hedges can materially reduce the portfolio’s effective exposure
and associated risk. Alongside active profit-taking as positions
perform, this means the underlying risk can be lower than
headline long-book exposures might suggest.
Question
Why should investors consider allocating
to emerging markets today?
Answer
There are several fundamental reasons why emerging markets
look well-placed today. Emerging markets sit at the centre of
several powerful structural trends: Taiwan and Korea are critical
to the global AI hardware supply chain; high tech Chinese
industrial companies are driving innovation in areas such as
batteries and power equipment; and the commodity backdrop
remains constructive, with higher metal prices supporting
commodity exporting countries across Latin America and Africa.
The macroeconomic backdrop also looks robust, with many
emerging market countries benefitting from stronger fiscal
positions relative to developed markets. Despite these tailwinds,
valuations remain compelling – much of the recent rally in
markets has reflected higher company earnings expectations
rather than rising valuation multiples, leaving the market still
trading at approximately a 40% discount to developed markets.
In addition, the market is highly bifurcated – we have seen
valuations decrease in the cheapest markets, such as Brazil
and Indonesia, whilst tech-heavy markets such as Taiwan have
become more expensive. Similarly, whilst many pockets of the
market stand to benefit from structural and cyclical trends, there
are also several more challenged areas, from Asian IT services
to Chinese banks. This dispersion creates a fertile ground for
stock picking, with significant scope to add value through both
long and short positions.
That said, emerging markets are not without their risks, as
illustrated by the recent geopolitical tensions in the Middle
East. However, with a supportive macroeconomic backdrop and
several key drivers supporting earnings growth, we think the case
for investing in emerging markets today is particularly compelling.
Nick Price
Chris Tennant
Portfolio Managers
5 October 2026
09
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS
Investment Toolkit
STRATEGY
Fidelity Emerging Markets Limited is an all-cap Global Emerging
Markets strategy with enhanced investment powers which seeks
to exploit a broad range of opportunities. As opposed to more
traditional long-only funds, the Company adopts an active
‘extension’ investment style with the strategy benefitting from an
expanded toolset which allows the portfolio managers to employ
long and short extensions using derivatives as and when high
conviction ideas are identified:
• Equities: The Company predominantly invests in equity
securities that offer a significant degree of absolute upside
from prevailing market prices. The portfolio managers
will seek opportunities across the market cap spectrum,
geographies, and consider listed companies, initial public
offerings and unlisted investments
• Long extensions: Derivatives are used to provide additional
exposure to stocks with the greatest upside potential and
to offset the reduction in equity exposure introduced by
the Company’s short positions. Most of the long and short
derivative exposure is currently achieved through Contracts
for Difference (“CFDs”).
• Short extensions: Derivatives are used to achieve the
economic effect of a short position in a security which the
portfolio managers believe is overvalued. Short positions are
implemented on an opportunistic basis for up to approximately
30% of total Net Assets under normal market conditions.
• Other instruments: The Portfolio Managers can
opportunistically access other derivative instruments such
as options to enhance the Company’s returns or manage
its risk profile. An example of return enhancement would
be the sale of call options against holdings in the fund in
high volatility environments, to capture the option premium,
whilst also providing an efficient exit from the position at a
strike price equivalent to the stock’s target price. An example
of risk control would be the purchase of appropriate index
put options in lower volatility environments to protect the
Company against negative movements in equity markets,
where such portfolio insurance can be purchased at an
attractively low premium.
How this fits with our investment philosophy
We believe that many emerging market companies can sustain
high levels of economic growth for years to come, driven by
attractive demographic profiles, immature markets, an abundance
of untapped natural resources, and generally low levels of
indebtedness. However, whilst these positive attributes provide
a fertile environment for companies to grow their earnings, it is
critical to ensure that each company we invest in can generate
superior and sustainable returns on assets that permit them to
fund the growth of their business, withstand competitive pressures
and achieve attractive returns for minorityshareholders.
With this in mind, we define high quality companies as those
thatexhibit:
• Quality – high quality, well capitalised companies capable
of achieving superior returns on assets, and where strong free
cash flow generation can be used to either self-fund future
growth or pay dividends to shareholders.
• Consistency of returns – dominant companies that can
maintain superior levels of growth and profitability resulting
from a sustainable competitive advantage, such as market
share, technology, or cost leadership; companies which
exhibit a solid track record of delivering attractive total
shareholder returns over time.
• Reasonable price – attractive valuations that understate the
intrinsic value of a company. Target prices are determined
for every stock considered for the portfolio, reflecting each
company’s sustainable level of earnings power across the
economic cycle and an appropriate valuation multiple.
Conversely, it is those weaker peers who are unable to compete
with the strongest franchises that are likely to fall by the wayside.
Using short positions, these weaker businesses form some of the
additional investment opportunities that we can take advantage
of, as an additional source of performance.
10
Fidelity Emerging Markets Limited | Annual Report 2026
Spotlight on Top 10 holdings
as at 30 June 2026
Based on Asset Exposure expressed as a percentage of Net Assets. Asset Exposure comprises the value of direct
equity investments plus market exposure to derivative instruments.
Taiwan Semiconductor Manufacturing (TSMC)
% of Net Assets
14.9%
TSMC is a leading Taiwanese semiconductor manufacturer. Its advanced technology and
manufacturing capabilities support a strong competitive position and attractive returns
on capital.
Industry Information Technology
Naspers
% of Net Assets
2.9%
Naspers is a South African holding company specialising in internet investments, including
online classifieds, payments and financial technology, and food delivery. Its portfolio includes
a significant investment in Chinese technology company Tencent.
Industry Consumer Discretionary
Samsung Electronics
% of Net Assets
10.6%
Samsung Electronics is a diversified Korean technology company. It is one of the world’s
largest manufacturers of memory chips and also has significant presence in mobile phones,
displays and consumer electronics.
Industry Information Technology
SK Hynix
% of Net Assets
7.5%
SK Hynix is a leading Korean manufacturer of memory chips used in computers, smartphones
and data centres, with a strong position in the advanced memory products required for
artificial intelligence applications.
Industry Information Technology
SK Square
% of Net Assets
4.9%
SK Square is a Korean holding company, whose principal investment is a significant stake in
SK Hynix, alongside interests in a range of other digital and technology companies.
Industry Industrials
11
Annual Report 2026 | Fidelity Emerging Markets Limited
GOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Elite Material
% of Net Assets
2.9%
Elite Material is a Taiwanese manufacturer of copper clad laminate, a specialist material
used to make printed circuit boards. Its products are increasingly used for high performance
computing and artificial intelligence servers.
Industry Information Technology
Advanced Micro-Fabrication Equipment (AMEC)
% of Net Assets
2.9%
AMEC is a Chinese manufacturer of equipment used in the production of semiconductors.
The company is positioned to benefit from increased investment in domestic semiconductor
manufacturing in China.
Industry Information Technology
Contemporary Amperex Technology (CATL)
% of Net Assets
2.8%
CATL is a Chinese manufacturer of batteries for electric vehicles and energy storage systems.
Its scale and leading-edge innovation have helped it establish a strong position in the global
battery market.
Industry Industrials
OTP Bank
% of Net Assets
2.6%
OTP Bank is Hungary’s largest bank and a major banking group across Central and Eastern
Europe, providing a broad range of retail and corporate banking services.
Industry Financials
Nu Holdings
% of Net Assets
2.6%
Nu Holdings is a Brazilian digital bank offering services including savings, payments,
credit cards and personal loans. The company has grown its customer base rapidly while
establishing a strong record of profitability.
Industry Financials
Spotlight on Top 10 holdings continued
as at 30 June 2026
12
Fidelity Emerging Markets Limited | Annual Report 2026
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.
Asset Exposure Fair value
$’000 %
1
$’000
Exposures – shares unless otherwise stated
Taiwan Semiconductor Manufacturing (shares, options and long CFDs)
Information Technology
128,777 14.9 113,131
Samsung Electronics (shares and long CFDs)
Information Technology 91,638 10.6 9,790
SK Hynix (shares and options)
Information Technology 64,582 7.5 66,012
SK Square
Industrials
42,702 4.9 42,702
Naspers (long CFDs)
Consumer Discretionary 25,456 2.9 5
Elite Material (long CFDs)
Information Technology 25,187 2.9 1,187
Advanced Micro-Fabrication Equipment (shares and long CFDs)
Information Technology
24,947 2.9 14,977
Contemporary Amperex Technology
Industrials 24,195 2.8 24,195
OTP Bank
Financials 22,221 2.6 22,221
Nu Holdings (options and long CFDs)
Financials
22,029 2.6 1,231
TBC Bank Group (long CFDs)
Financials 21,254 2.5 472
Sieyuan Electric
Industrials
21,131 2.5 21,131
Samsung C&T
Industrials 20,038 2.3 20,038
Wiwynn (shares and long CFDs)
Information Technology 19,911 2.3 5,656
Accton Technology (long CFDs)
Information Technology 19,658 2.3 1,601
Lotes (long CFDs)
Information Technology
19,142 2.2 (482)
Orizon Valorizacao de Residuos
Industrials 18,651 2.2 18,651
Kaspi.kz (options and long CFDs)
Financials 18,251 2.1 1,117
Torex Gold Resources (long CFDs)
Materials
17,663 2.0 (307)
Unimicron Technology
Information Technology 17,567 2.0 17,567
Aura Minerals (shares and long CFDs)
Materials 17,404 2.0 2,177
Forty Largest Holdings
as at 30 June 2026
13
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Asset Exposure Fair value
$’000 %
1
$’000
Tencent Holdings (long CFDs)
Communication Services
17,198 2.0 40
MediaTek
Information Technology 16,790 2.0 16,790
Astor Transformator Enerji Turizm Insaat ve Petrol Sanayi Ticaret
Industrials 16,728 1.9 16,728
Aris Mining (long CFDs)
Materials
16,574 1.9 (1,158)
Asia Vital Components (long CFDs)
Information Technology 16,216 1.9 650
Auto Partner
Consumer Discretionary 14,974 1.7 14,974
Guaranty Trust Holding
Financials
14,096 1.6 14,096
Montage Technology (shares and long CFDs)
Information Technology 13,717 1.6 5,519
Banco BTG Pactual
Financials 13,439 1.6 13,439
Itausa
Financials
12,851 1.5 12,851
ASPEED Technology (long CFDs)
Information Technology 12,408 1.4 (949)
Techtronic Industries (long CFDs)
Industrials 12,300 1.4 761
Grand Process Technology (long CFDs)
Information Technology
11,720 1.4 964
Grupo Mexico (long CFDs)
Materials 11,290 1.3 (456)
First Quantum Minerals (shares and long CFDs)
Materials 11,282 1.3 1,218
ASML Holding (options)
Information Technology
10,974 1.3 2,674
ASE Technology Holding (shares and long CFDs)
Information Technology 10,651 1.2 2,058
Minsur
Materials 10,648 1.2 10,648
Global Standard Technology
Information Technology
10,119 1.2 10,119
Forty largest exposures 936,379 108.4 504,038
Other exposures 648,451 75.0 277,977
Total exposures before index positions and index hedging 1,584,830 183.4 782,015
Forty Largest Holdings continued
as at 30 June 2026
14
Fidelity Emerging Markets Limited | Annual Report 2026
Forty Largest Holdings continued
as at 30 June 2026
Asset Exposure Fair value
$’000 %
1
$’000
Add: index positions
FTSE Taiwan Index (future) 6,954 0.8 67
Less: index hedging
MSCI Emerging Markets Index (future) (205,692) (23.8) 4,182
Total exposure after the netting of index positions and index hedging 1,386,092 160.4 786,264
Forward currency contracts 188
Gross Asset Exposure
2
1,386,092 160.4
Portfolio Fair Value
3
786,452
Net current assets (excluding derivative assets and liabilities) 77,551
Total Net Assets 864,003
1 Asset Exposure (as defined in the Glossary of Terms on page 87) expressed as a percentage of Net Assets.
2 Gross Asset Exposure (as defined in the Glossary on page 88) comprises market exposure to investments of $767,445,000 (per Note 10 on page 60) plus market exposure
to derivatives instruments of $618,647,000 (as per Note 11 on page 62).
3 Portfolio Fair Value comprises investments of $767,445,000 plus derivative assets of $41,149,000 less derivative liabilities of $22,142,000. (per the Statement of Financial
Position on page 49).
15
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Distribution of the Portfolio
as at 30 June 2026
Sector
Asset
Exposure
%
1
Benchmark
Index
%
Information Technology 71.3 45.3
Industrials 28.3 6.7
Materials 27.0 5.4
Financials 26.9 18.4
Consumer Discretionary 14.2 7.2
Consumer Staples 5.9 2.6
Communication Services 3.2 6.0
Energy 2.3 3.1
Health Care 1.5 2.4
Real Estate 1.2 1.0
Investment Funds 0.9 –
Utilities 0.7 1.9
Others (index positions) 0.8 –
Total excluding index hedging 184.2 100.0
Index hedging (23.8) –
Total including index hedging 160.4 100.0
1 Asset Exposure expressed as a percentage of Net Assets.
16
Fidelity Emerging Markets Limited | Annual Report 2026
Country
Asset
Exposure
%
1
Benchmark
Index
%
Taiwan 44.4 27.3
South Korea 34.5 23.7
China 22.0 19.0
Brazil 12.3 3.8
India 9.4 11.1
South Africa 7.3 2.9
United States of America 7.3 –
Canada 5.1 –
Kazakhstan 3.8 –
Turkiye 3.2 0.4
Peru 3.0 0.4
Poland 2.9 1.0
Mexico 2.9 1.7
Indonesia 2.6 0.4
Hungary 2.6 0.3
Hong Kong 2.5 –
Georgia 2.5 –
Colombia 1.9 0.1
Nigeria 1.6 –
Netherlands 1.5 –
Zambia 1.3 –
Vietnam 1.3 –
Panama 1.0 –
Greece 0.9 0.5
Austria 0.9 –
Thailand 0.8 1.0
Ivory Coast 0.6 –
Cyprus 0.6 –
Virgin Islands, British 0.5 –
Argentina 0.5 –
Germany 0.5 –
Saudi Arabia 0.4 2.4
Chile 0.3 0.4
Cameroon 0.2 –
Congo, the Democratic Republic of the 0.2 –
Philippines 0.2 0.3
Romania 0.2 –
Australia 0.2 –
United Kingdom 0.2 –
Norway 0.1 –
Russia – –
Others – 3.3
Total excluding index hedging 184.2 100.0
Index hedging (23.8) –
Total including index hedging 160.4 100.0
1 Asset Exposure expressed as a percentage of Net Assets.
Distribution of the Portfolio continued
as at 30 June 2026
17
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Ten Highest Contributors to NAV relative return %
SK Square +7.4
Elite Material +6.4
Pan African Resources +4.4
Sieyuan Electric +2.1
Tencent Holdings +2.1
Aaura Minerals +2.0
Advanced Micro-Fabrication Equipment +2.0
Accton Technology +1.8
Alibaba Group +1.7
Endeavour Mining +1.6
Ten Highest Detractors from NAV relative return %
Naspers (6.0)
Short Position (2.2)
Five Star Business Finance (2.1)
TBC Bank Group (1.9)
Tencent Music Entertainment (1.5)
Short Position (1.4)
Full Truck Alliance (1.4)
Kaspi (1.4)
APT Medical (1.2)
Short Position (1.1)
Note: Derivative positions are included in the above investment positions.
Source: Fidelity International.
Attribution Analysis
as at 30 June 2026
18
Fidelity Emerging Markets Limited | Annual Report 2026
Five Year Record
For the year ended 30 June 2026 2025 2024 2023 2022
Investment Performance
Net asset value per Participating Preference
Share total return
1
+92.3% +11.8% +18.7% -2.6% -27.9%
Share Price total return
1
+99.3% +14.0% +22.6% -5.2% -30.0%
MSCI Emerging Markets Index total return +48.2% +6.3% +13.2% -2.8% -14.9%
Assets
Gross asset exposure ($m)
1
1,386.1 1,235.3 1,177.3 1,185.0 1,120.1
Net assets ($m) 864.0 771.6 753.4 796.7 796.8
Gross gearing (%)
1
60.4 60.1 56.3 48.7 40.6
Net gearing (%)
1
8.8 5.5 4.3 (3.9) (7.6)
Net asset value per Participating Preference Share ($)
1
21.94 11.99 10.09 8.75 8.75
Net asset value per Participating Preference Share (£)
1
16.53 8.75 7.98 6.88 7.20
Share Price data at year end
Share price (£) 15.30 7.83 7.03 5.88 6.34
Discount (%)
1
7.4 10.5 11.9 14.6 12.0
Earnings and Dividends paid
Revenue earnings per Participating Preference Share ($)
2
0.32 0.31 0.16 0.22 0.15
Capital earnings/(losses) per Participating
Preference Share ($)
2
8.23 1.52 1.29 (0.06) (5.11)
Total earnings/(losses) per Participating
Preference Share ($)
2
8.55 1.83 1.45 0.16 (4.96)
Dividend per Participating Preference Share $0.33 $0.26 $0.20 $0.19 $0.16
Ongoing Charges (%)
1
0.87 0.83 0.81 0.81 0.60
1 Alternative Performance Measures. Please see page 79 and the Glossary of Terms on pages 87 to 89 for further details.
2 Calculated based on weighted average number of participating preference shares in issue during the year.
Sources: JPMorgan and Datastream
Past performance is not a guide to future returns.
19
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
The Directors have pleasure in presenting the Strategic Report of
the Company. The Chairman’s Statement and Portfolio Managers’
Review on pages 2 to 8 form part of the Strategic Report.
Business and Status
The Company is a closed-ended investment scheme authorised
by the Guernsey Financial Services Commission and is listed on
the London Stock Exchange.
The Company was incorporated in Guernsey on 7 June 1989
and commenced business as an investment company on
19September 1989.
Manager and Investment Manager
The Alternative Investment Fund Manager (FIL Investment
Services (UK) Limited/ the “Manager”) has delegated the role
of Investment Manager to FIL Investments International (‘Fidelity
International’, the ‘Investment Manager’). Both the Manager and
Investment Manager are part of the FIL Group of companies,
collectively‘Fidelity’.
Conditional Tender Offer
If the NAV total return for the five years ended 30 September
2026 had not exceeded the Benchmark Index, the Company
would have been required to make a tender offer for up to 25%
of the shares in issue (excluding shares held in treasury). As at
30September 2026, the NAV total return for the five years ending
30September 2026 was 82.7%. The Benchmark Index returned
55.7% over the sameperiod. Therefore, the tender offer will
notproceed.
A similar conditional tender offer will be put in place for the five
years ending 30 June 2031 such that if the NAV total return for
that period does not exceed the Benchmark Index, the Company
will make a tender offer for up to 25% of the shares in issue
(excluding shares held in treasury) at that time.
Life of the Company
The Company has committed to hold a continuation vote every
five years. This allows shareholders the opportunity to decide on
the long-term future of the Company. The next continuation vote
will take place at this year’s AGM on Tuesday, 1 December 2026
and the Board unanimously recommends that shareholders vote
in favour of continuation. Please refer to the Notice of AGM on
page 81 for further details.
Management
The Company has no employees or premises and the Board
is comprised of non-executive Directors. During the year under
review, the majority of day-to-day operations and functions of the
Company were delegated to Fidelity, and to third party service
providers who are subject to the oversight of the Board. There
are therefore no disclosures to be made in respect of employees.
During the year under review Fidelity, provided investment and
risk management services, JP Morgan Chase Bank was the
Custodian and JP Morgan Administration Services (Guernsey)
Limited was the Administrator. Company Secretarial services are
provided by FIL Investments International. The Board regularly
reviews the performance and risks of its primary service providers
and checks that they have appropriate frameworks in place for
the oversight of their internal controls, monitoring andreporting.
Strategic Report
20
Fidelity Emerging Markets Limited | Annual Report 2026
Strategic Report continued
INVESTMENT OBJECTIVE
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.
INVESTMENT POLICY
The Company seeks to meet its investment objective through investment in a diversified portfolio of equity or equity‑linked
securities and derivative instruments providing exposure to emerging market companies.
The Manager integrates sustainability analysis into its investment process and promotes environmental and social characteristics
in respect of the companies in which itinvests.
Investment minimum constraints
At least 80% of the Company’s total assets (measured at the time of investment) will be exposed to companies that have their head
office in, are listed in or with assets, operations, income or revenues that are predominantly in or derived from emergingmarkets.
The Company is not subject to any geographical or sector limits, although the Manager will maintain a diversified portfolio of a
minimum of 75 holdings (comprised of a mixture of long and short exposures) in companies listed in or operating across at least
15countries.
Fidelity is not required to seek to ensure that the Company’s cash resources are fully invested at all times. Accordingly, there may be
times when the Company holds cash or money market instruments pending investment. The Company’s net market exposure will not
fall below 90% of the Company’s net assets save to the extent that the Manager is required to realise cash to fund a tender offer or
other return of capital.
Permitted instruments
The Company may invest through equities, index linked securities, contracts for difference (“CFDs”), equity linked and other debt
securities, cash deposits, money market instruments, equity related securities, foreign currency exchange forward transactions
and other interests including derivative instruments. The Company may invest directly in China A and B Shares and invest in
Non-Voting Depository Receipts, American Depositary Receipts, Global Depositary Receipts and Equity Linked Notes. References to
“companies” in this investment policy may include operating businesses that are not in corporate form.
Forward transactions and derivatives, including futures, options, swaps and contracts for difference, may be used to enhance
portfolio performance as well as for efficient portfolio management and hedging.
The Company may invest in unlisted securities and in other investment funds, subject to the investment restrictions set outbelow.
Investment Restrictions
The Company will invest and manage its assets with an objective of spreading risk with the following investment restrictions:
• no single or aggregate interest in any one company shall represent more than 15% of total assets (measured at the time of investment);
• no more than 15% of total assets (measured at the time of investment) may be invested in unlisted securities;
• up to 15% of total assets (measured at the time of investment) may be invested in other listed or unlisted investment funds
where such funds offer the only practicable means of gaining exposure to a particular emerging market, including other funds
managed or advised by the Manager or its associates;
• up to 20% of total assets (measured at the time of investment) may be invested in securities and instruments which provide
exposure to companies which do not have their head office in, are not listed in or whose assets or operations are not
predominantly in emerging markets, provided that a material proportion of the income or revenues of each such company
derives from emerging markets.
Although the Company has no present intention to make any such investments, for so long as required by the Listing Rules, no more
than 10% of the Company’s total assets (measured at the time of investment) may be invested in other London-listed closed ended
funds that do not have stated policies to invest no more than 15% of their total assets in other London-listed closed endedfunds.
21
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STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS
Strategic Report continued
Leverage and derivatives
The Company may be geared through (i) borrowing of up to 10% of its net asset value and/or (ii) by entering into derivative
positions (both long and short) which have the effect of gearing the Company’s portfolio, to enhance performance.
Derivatives usage will focus on, but will not be limited to the following investment strategies:
• as an alternative form of gearing to bank loans, for instance by the use of long CFDs;
• to enhance the investment returns by taking short positions in stocks or markets that the Manager considers to be over-valued or
impaired;
• to enhance positions, manage position sizes and control risk through the use of options;
• to hedge equity market risks where suitable protection can be purchased to limit the downside of a falling market at a
reasonable cost; and
• to gain or hedge currency exposure, both long and short, using foreign currency exchange forward transactions.
The Company is subject to the following limits in respect of its use of derivatives:
• Net Market Exposure will not exceed 120% of the net asset value of the Company.
• Gross Asset Exposure will not exceed 165% of the net asset value of the Company.
• In normal market circumstances, the Company expects that the Manager will maintain a Net Market Exposure in the range of
100% to 110%.
Exposure Definitions
• Long Exposure is the value of the Company’s direct and indirect investments in long positions (including the economic value of
the exposure to the reference asset of any derivative instrument).
• Short Exposure is the value of the Company’s direct and indirect investments in short positions (including the economic value of
the exposure to the reference asset of any derivative instrument), excluding Hedges.
• Hedges are short positions that demonstrate risk-reduction qualities by offsetting long positions held by the Company which
have regional congruence and a correlation of at least 80% to the Long Exposure of the Company.
• Net Market Exposure is the net positive market exposure of the Company’s portfolio, whether through direct or indirect
investment, with short and hedge positions subtracted from long positions. It is calculated as (Long Exposure – Hedges) –
ShortExposure.
• Gross Asset Exposure is the total market exposure of the Company’s portfolio, whether through direct or indirect investment.
Itiscalculated as: (Long Exposure + Short Exposure) – Hedges.
Benchmark Index
The Company’s benchmark is the MSCI Emerging Markets (total return) Index (the ‘Index’).
Modification of Investment Objective or Investment Policy
In accordance with the Listing Rules of the Financial Conduct Authority, any material change to the Company’s published Investment
Objective or Investment Policy will require the prior approval of both the Financial Conduct Authority and the shareholders of the
Company (by way of an ordinary resolution).
STRATEGY
22
Fidelity Emerging Markets Limited | Annual Report 2026
Strategic Report continued
PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES,
RISK MANAGEMENT
In accordance with provisions 33 and 34 of the AIC (Association
of Investment Companies) Code, the Board has a robust ongoing
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
orliquidity.
The Board will implement the new requirement, under provision
34 of the AIC Code applicable for reporting periods from
1January 2026, of a Board declaration on the effectiveness of
material risk management and internal controls in the Company’s
next reporting year.
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 that the Company faces.
The Manager also has responsibility for the day-to-day 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 UK corporate
governance obligations.
EMERGING RISKS
The Audit and Risk Committee continues to identify emerging risks
and will take any feasible action to mitigate their potential impact.
The risks identified are placed on the Company’s risk matrix and
graded appropriately. This process, together with the policies
and procedures for the mitigation of existing and emerging risks,
is updated and reviewed regularly in the form of comprehensive
reports reviewed by the Audit and Risk Committee.
Key emerging issues that the Audit and Risk Committee has
identified include:
Climate Change – Globally, climate change (large scale shift in the
planet’s weather patterns and average temperatures) effects are
already being experienced in the form of changing weather patterns.
Extreme weather events can potentially impact the operations of
investee and potential investee companies, their supply chains and
their customers. Climate change continues to be an emerging risk.
The Board notes that the Manager includes ESG considerations,
including climate change, into the Company’s investment process.
The Board will continue to monitor how this may impact the
Company as a risk to investment valuations and potentially affect
shareholder returns.
Artificial Intelligence (“AI”) – The Board, together with the
Manager, is also monitoring the emerging risks posed by the
rapid advancement of AI and how it may threaten the Company’s
activities and its potential impact on the portfolio and investee
companies. AI can provide asset managers powerful tools, such
as enhancing data analysis risk management, trading strategies,
operational efficiency and client servicing, all of which can lead to
better investment outcomes and more efficient operations. However,
with these advances in computing power that will impact society,
there are risks from its increasing use and manipulation with the
potential to harm, including a heightened threat to cybersecurity.
Other emerging risks may continue to evolve from unforeseen
geopolitical and economic events. There are currently several
geopolitical factors including ongoing wars, international trade
battles and protectionism that could mean greater stock market
risks and heightened macro-economic changes such as inflation,
interest rates, currency fluctuations, energy costs and an increased
regulatory environment.
The Board notes that the Manager monitors these issues, and
has integrated macro and ESG considerations, including climate
change, into the Company’s investment process. The Board will
continue to monitor how this may impact the Company as a risk,
the main risk being the impact on investment valuations.
23
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Strategic Report continued
PRINCIPAL RISKS
The Board determines the nature and extent of any risks it is willing to take in order to achieve its strategic objectives. The risks listed
below and on pages 22 to 25 are considered by the Board to be the principal risks and uncertainties faced by the Company.
Principal Risks Description and Impact Mitigation
1. Geopolitical
Risk
Trend
(from
previous year)
:
Increased
Political, socio-economic and cultural events, trends and
developments may have an adverse effect on the value
of the Company’s investments and the Manager’s ability
to access markets freely.
The Company is exposed to several geopolitical risks.
Thegeopolitical landscape continues to change globally
and is largely shaped by the ongoing effects of war
conflicts, tariff wars, deglobalisation trends and significant
supply disruption. The Middle East and Russia are
significant net exporters of oil, natural gas and a variety
of soft commodities and supply limitations have fuelled
global inflation and economic instability, specifically
within Western nations. Macro economic uncertainty
continues to impact Western investment appetite.
The economies, currencies and financial markets of a
number of developing countries in which the Company
invests may be extremely volatile. Emerging markets
are less established, and tend to be more volatile,
than developed markets. They are therefore more
likely to experience risks that in developed markets are
associated with unusual market conditions.
• The Board has oversight of the portfolio and
regularly reviews the impact any material
economic or market changes and has comfort
that the portfolio is also sufficiently diversified by
sector and number of holdings.
• To manage the risks posed by adverse price
fluctuations the Company’s investments are
geographically diversified and will continue to
be so. Active concentrations (for example by
country) are being closely monitored.
• The exposure to any one company or group
(other than an investment company, unit trust
or mutual fund) is unlikely to exceed 5% of the
Company’s net assets at the time the investment
is made.
• According to the Investment Policy, “the
Company is not subject to any geographical
or sector limits, although the Manager will
maintain a diversified portfolio of a minimum
of 75 holdings (comprised of a mixture of long
and short exposures) in companies listed in or
operating across at least 15 countries”.
2. Investment
Performance and
Gearing
Trend
(from
previous year)
:
Decreased
Risk of underperformance for a sustained period by the
Portfolio Manager and lack of enough outperformance to
offset the longer-term record.
The Portfolio Manager may fail to use gearing effectively,
resulting in a failure to outperform in a rising market or to
underperform in a falling market.
• An investment strategy overseen by the Board to
optimise returns.
• The Portfolio Managers are supported by a
well-resourced team of experienced analysts
covering the market.
• Board scrutiny of the Manager and the ability in
extreme circumstances to change the Manager.
• The Board sets a limit on gearing and provides
oversight of the Manager’s use of gearing.
• Under normal market conditions, the Company’s
Net Market Exposure is not expected to exceed
the NAV by more than 10%, however in all other
scenarios the Company’s Net Market Exposure
may not exceed the NAV by more than 20% whilst
the Company’s Gross Asset Exposure will not
exceed the NAV by more than 65%
3. Competition
Risks,
Marketplace
Threats Impacting
Business Growth
Trend
(from
previous year)
:
Increased
Risks that external pressures impact the Company’s
ability to maintain and grow the business due to the
rise of passive vehicles and ETFs, increasing demand
for integrated digital/wealth solutions, and the gradual
transition of an ageing shareholder base.
Industry consolidation and structural change continue,
driven by cost pressures and the need for scale. This
trend has been reinforced by heightened shareholder
activism, particularly in the UK.
• Ongoing review by the Board, Broker and
Manager of peer group and industry activity.
• Annual review of strategy by the Board, and review
by the Board of the strategic direction of the
Company on an ongoing basis to ensure it offers a
relevant product to shareholders.
• Regular review by the Board of marketing,
public relations and sales activity, and the
shareholderregister.
24
Fidelity Emerging Markets Limited | Annual Report 2026
Strategic Report continued
Principal Risks Description and Impact Mitigation
4. Changes in
Legislation,
Taxation or
Regulation
Trend
(from
previous year)
:
Stable
There is a risk of the Company not complying with
the regulatory requirements of the Guernsey Financial
Services Commission, UK listing rules, corporate
governance requirements or local tax requirements
that could result in loss of status as an Authorised
Closed Ended Investment Scheme, becoming subject to
additional tax charges or to exclusion from trading in
particular markets.
Investment companies remain in scope of the FCA’s
Consumer Composite Investments (CCI) regime, which
will replace PRIIPs. While this introduces changes to
disclosure frameworks, the final rules emphasise flexibility,
simplified communication and comparability of key
metrics, allowing firms to tailor investor communications
more effectively and reduce unnecessary complexity.
• The Board monitors tax and regulatory changes
at each Board meeting and through active
engagement with regulators and trade bodies by
the Manager.
• The Manager regularly attends regular briefings
from key industry bodies.
• Regulatory developments are monitored and
managed by Fidelity through active lobbying
and negotiations as well as a robust change
management process.
5. Business
Continuity & Crisis
Management
Trend
(from
previous year)
:
Increased
Business process disruption risk from continued threats of
cyberattacks, geopolitical events, outages, fire events and
natural disasters, resulting in financial and/or reputational
impact to the Company affecting the functioning of
thebusiness.
In addition to the Manager, the Company relies on other
third-party service providers, principally the Registrar,
Custodian and Depositary who may be subject to
business continuity and crisis management issues.
• Fidelity has Business Continuity and Crisis
Management Frameworks in place to deal with
business disruption and assure operational
resilience.
• All third-party service providers are subject to
a risk-based programme of oversight by the
Manager. Third-party service provider internal
controls reports are received on an annual basis,
and any concerns are investigated.
6. Operational
Risk
Trend
(from
previous year)
:
Stable
Financial losses or reputational damage from inadequate
or failed internal processes, people and systems or from
external parties and events.
• Fidelity’s Operational Risk Management
Framework is designed to pro-actively prevent,
identify and manage operational risks inherent in
most activities.
• Fidelity uses robust systems and procedures
dedicated to its operational processes. Its risk
management structure is designed according to
the FCA’s three lines of defence model.
7. Cybercrime
and Information
Security Risks
Trend
(from
previous year)
:
Increased
Cybersecurity risk increased use of artificial intelligence
(AI) and cyberattacks or threats to the functioning
of global markets and to the Manager’s own
business model, including its and the Company’s
outsourcedsuppliers.
The external threat environment has intensified, driven by
AI enhanced ransomware, identity centric attacks, rapidly
expanding supply chain compromise vectors, and rising
nation state activity.
• The risk is monitored by the Board with the help of
the Manager’s global cybersecurity team and their
extensive Strategic Cyber and Information Security
programme and assurances from outsourced
suppliers.
• The Manager has established a comprehensive
framework of information security policies and
standards which provide a structured approach
to identify, prevent, and respond to information
security threats. The framework ensures consistency
in Fidelity’s security measures, enhances its ability
to adapt to evolving/emerging threats, and
compliance with changing regulatory requirements.
• The Company’s other service providers also have
cybersecurity measures in place.
• Key performance indicators and metrics have
been developed by the Manager to monitor the
overall efficacy of cybersecurity processes and
controls and to further enhance the Manager’s
cybersecurity strategy and operational resilience.
25
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Strategic Report continued
Principal Risks Description and Impact Mitigation
8. Level of
Discount to Net
Asset Value
(“NAV”)
Trend
(from
previous year)
:
Stable
The risk that the share price performance lags NAV
performance. A discount in the price at which the
Company’s shares trade to NAV would mean that
shareholders would be unable to realise the true
underlying value of their investment. In considering the
risk that the discount to NAV poses to shareholder value
and returns, both the absolute level of the discount and
the amount relative to the Company’s peer group and the
wider market are considered.
• The Board reviews the investment strategy,
investment performance and the marketing
approach, given the influence of all these factors
on the discount. Due to the nature of investment
companies, the price of the Company’s shares
and its discount to NAV are factors which are not
completely within the Company’s control.
• The Company’s share price, NAV and discount
volatility are monitored daily by the Manager and
the Company’s Broker and considered by the
Board on a regular basis. The demand for shares
can be influenced through good performance and
an active investor relations programme.
• Discretionary repurchases of ordinary shares
are made within guidelines set by the Board
considering prevailing market conditions.
9. Key Person Risk
Trend
(from
previous year)
:
Stable
Loss of a Portfolio Manager or other key individuals could
lead to potential performance and/or operational issues.
There is also a risk that the Manager has inadequate
succession plans for other key operational individuals.
• Fidelity has successions plans in place for Portfolio
Managers with a designated PM and a Co-PM
identified for the Company.
• Depth of the team within Fidelity.
• Experience of the analysts covering the
Company’sinvestments.
10. Lack of Market
Liquidity Risk
Trend
(from
previous year)
:
Stable
Trading volumes on the stock exchanges of developing
countries can be substantially lower than in the leading
stock markets of the developed world and trading may
even be temporarily suspended during certain periods.
Liquidity can also be negatively impacted by temporary
capital controls in certain markets. A lower level of
liquidity can exaggerate the fluctuations in the value
ofinvestments.
Country allocations may add liquidity challenges. Whilst
country active exposures are a residual of stock picking
approach used by the Portfolio Manager; country risk
is heightened amid elevated geopolitical uncertainties
which may impact liquidity risk profile of the Company.
• The Company is required to disclose its own
Liquidity Risk Policy in the Annual Report.
• At a Fidelity corporate level, the Manager
as the AIFM manages liquidity for each fund
in accordance with the Fund Investment Risk
Policy, which incorporates Fund Liquidity Risk
Management Framework.
• The restrictions on concentration and the
diversification requirements protect the overall
value of the Company from the risks created by the
lower level of liquidity in the markets in which the
Company operate.
Other risks facing the Company include:
Tax and Regulatory Risks
There is a risk of the Company not complying with the regulatory requirements of the Guernsey Financial Services Commission,
UKlisting rules, corporate governance requirements or local tax requirements that could result in loss of status as an
Authorised Closed Ended Investment Scheme, becoming subject to additional tax charges or to the exclusion from trading in
particularmarkets.
The Board monitors tax and regulatory changes at each Board meeting and through active engagement with regulators and trade
bodies by the Manager.
26
Fidelity Emerging Markets Limited | Annual Report 2026
Strategic Report continued
VIABILITY STATEMENT
In accordance with the 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
company with the objective of achieving 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.
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. In making an assessment
on the viability of the Company, the Board has considered the
following:
• The ongoing relevance of the investment objective in
prevailing market conditions;
• The Company’s NAV and share price performance;
• The principal and emerging risks and uncertainties facing the
Company as set out above and their potential impact;
• The future demand for the Company’s shares;
• The Company’s share price discount to its NAV;
• The liquidity of the Company’s portfolio;
• Consideration of the continuation vote at the next AGM;
• The level of income generated by the Company; and
• Future income and expenditure forecasts.
The Company has assumed for the purposes of the viability
statement that the continuation vote in 2026 would be passed.
This assumption is based on the Company’s performance to
30June 2026 (in absolute terms and versus the benchmark),
thelevel of discount and informal conversations with
shareholders. Formal feedback from shareholders on the
continuation vote has been sought as part of the preparation
of the 2026 financial statements. The Directors have not
been informed by any shareholder that they will vote
againstcontinuation.
The Company’s performance for the five year reporting period
to 30 June 2026 outperformed the Benchmark Index, with a NAV
total return of +79.2%, and a share price total return of +84.9%
compared to the Benchmark Index total return of +47.5%.
The Board regularly reviews the investment policy and considers
whether it remains appropriate. The Board has concluded
that there is a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as
they fall due over the next five years based on the following
considerations:
• The Investment Manager’s compliance with the Company’s
investment objective and policy, its investment strategy and
asset allocation;
• The fact that the portfolio comprises sufficient readily
realisable securities which can be sold to meet funding
requirements if necessary; and
• The ongoing processes for monitoring operating costs
and income which are considered to be reasonable in
comparison to the Company’s total assets.
When considering the risk of under-performance, a series of
stress tests were carried out including in particular the effects
of any substantial future falls in investment value on the ability
to maintain dividend payments and repay obligations as and
when they arise.
In preparing the Financial Statements, the Board has
considered the impact of regulatory changes and significant
market events and how this may affect the Company. In
addition, the Directors’ assessment of the Company’s ability
to operate in the foreseeable future is included in the Going
Concern Statement which is included in the Directors’ Report on
page37.
Promoting the Success of the Company
The Company is not required to comply with the provisions of
the UK Companies Act 2006, but it is a requirement of the AIC
Code of Corporate Governance to report upon Section172
of this statute irrespective of domicile. Section172 recognises
that Directors of a company must act in a way they consider,
in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole,
and in doing so have regard (amongst other matters) to the
likely consequences of any decision in the long-term; the
need to foster relationships with the Company’s suppliers,
customers and others; the impact of the Company’s operations
on the community and the environment; the desirability of
the Company maintaining a reputation for high standards
of business conduct; and the need to act fairly as between
members of the Company.
27
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS STRATEGY
Strategic Report continued
As an externally managed Investment Company, the Company
has no employees or physical assets, and a number of the
Company’s functions are outsourced to third parties. The key
outsourced function is the provision of investment management
services by the Manager, but other professional service providers
support the Company by providing administration, custodian,
banking and audit services. The Board considers the Company’s
key stakeholders to be the existing and potential shareholders, the
external appointed Manager and other third-party professional
service providers. The Board considers that the interest of these
stakeholders is aligned with the Company’s objective of delivering
long-term capital growth to investors, in line with the Company’s
stated objective and strategy, while providing the highest
standards of legal, regulatory and commercial conduct.
The Board, with the Portfolio Manager, sets the overall
investment strategy and reviews this regularly. In order to
ensure good governance of the Company, the Board has set
various limits on the investments in the portfolio, whether in the
maximum size of individual holdings, the use of derivatives,
the level of gearing and others. These limits and guidelines
are regularly monitored and reviewed and are set out in the
AnnualReport.
The Board places great importance on communication with
shareholders and is committed to listening to their views. The
primary medium through which the Company communicates
with shareholders is through its Annual and Half Year Financial
Reports. Monthly factsheets are also produced. Company related
announcements are released via a regulatory information
service (‘RNS’) to the London Stock Exchange. All of the
aforementioned information is available on the Company’s website
www.fidelity.co.uk/emergingmarkets. Shareholders may also
communicate with Board members at any time by writing to
the Company Secretary at FIL Investments International, Beech
Gate, Millfield Lane, Tadworth, Surrey KT20 6RP or by email at
investmenttrusts@fil.com. The Portfolio Managers meet with major
shareholders, potential investors, stock market analysts, journalists
and other commentators throughout the year. These communication
opportunities help inform the Board in considering how best to
promote the success of the Company over the long-term.
The Board seeks to engage with the Manager and other service
providers and advisers in a constructive and collaborative way,
promoting a culture of strong governance, while encouraging
open and constructive debate, in order to ensure appropriate
and regular challenge and evaluation. This aims to enhance
service levels and strengthen relationships with service providers,
with a view to ensuring shareholders’ interests are best served,
by maintaining the highest standards of commercial conduct
while keeping cost levels competitive.
Whilst the Company’s direct operations are limited, the Board
recognises the importance of considering the impact of the
Company’s investment strategy on the wider community and
environment. The Board believes that a proper consideration of ESG
issues aligns with the Company’s investment objective to deliver
long-term growth in both capital and income, and the Board’s review
of the Manager includes an assessment of their ESG approach.
In addition to ensuring that the Company’s investment objective
was being pursued, key decisions and actions taken by the
Directors during the reporting year, and up to the date of this
report, have included:
• Marketing & PR
The Board has continued to be proactive in its efforts to
promote the success of the Company. It has worked closely
with the Manager, utilising the Manager’s extensive marketing
capabilities, in combination with the Company’s appointed
stockbrokers, and public relations firm to continue to execute
a comprehensive promotional programme for the Company.
• Discount Control – Share Buybacks
The Company continued a share buyback programme
to address the discount to NAV at which the Company’s
sharestrade.
• Dividend
The decision to recommend a dividend of $0.33 per
Participating Preference Share in respect of the year ended
30 June 2026 (2025: $0.26).
Board Diversity
The Board’s overriding intention is to ensure that it is made up
of the best combination of people in order to achieve long-term
capital growth for the Company’s shareholders from an actively
managed portfolio of investments. To this effect, the Board, as
part of its succession plan, will continue to appoint individuals
who, together as a Board, will aim to ensure the continued
optimal promotion of the Company in the marketplace.
The table below reports the gender diversity of the Board as at
30 June 2026.
Gender Reporting
Number of
Board
Members
Percentage
of the Board
Number of
Senior Board
Positions
Men 3 60% 2
Women 2 40% 1
28
Fidelity Emerging Markets Limited | Annual Report 2026
Strategic Report continued
The Board’s composition met the target of 40% of women on
FTSE 350 company boards by the 2025 deadline set by the FTSE
Women Leaders Review. The Board also meets the FCA target
that one of the senior Board positions is held by a woman. This
senior position is held by Heather Manners as the Chairman of
the Board and the Nomination Committee.
The Board meets the recommendations of the Parker Review
Committee that each FTSE 250 company should have at least
one director from an ethnic minority background, as can be seen
from the table below.
Ethnic Background Reporting
Number of
Board
Members
Percentage
of the Board
Number of
Senior Board
Positions
White British
or other White
(including minority
white groups) 4 80% 3
Asian/Asian British 1 20% 0
CORPORATE AND SOCIAL RESPONSIBILITY
Environmental, Social and Governance (“ESG”) in the
Investment Process
The Board has contracted with the Manager to provide the
Company with investment management services. The Board
believes that ESG considerations are an important input into
the assessment of the value of its investments. The investment
universe is undergoing significant structural change and is likely
to be impacted by increasing regulation as a result of climate
change and other social and governance factors. The Board is
committed to reviewing how the Manager applies ESG factors
in the investment process. The Fidelity group of companies
(including the Manager and Investment Manager) sets out
its commitment to responsible investing and provides a copy
of its detailed Responsible Investing at www.fidelity.co.uk/
responsible-investing.
Socially Responsible Investment
The Manager’s primary objective is to produce superior financial
returns for the Company’s shareholders. It believes that high
standards of corporate social responsibility (CSR) make good
business sense and have the potential to protect and enhance
investment returns.
Corporate Engagement
The Board believes that the Company should, where appropriate,
take an active interest in the affairs of the companies in which
it invests and that it should exercise its voting rights at their
general meetings. It delegates the responsibility for corporate
engagement and shareholder voting to the Investment Manager
who updates the Board on any issues and activities. These
activities are reviewed regularly by the Manager’s corporate
governance team.
Streamlined Energy and Carbon Reporting (SECR)
As an investment company with all its activities outsourced to
third parties, the Company’s own direct environmental impact
is minimal. The Company has no premises, consumes no
electricity, gas or diesel fuel and consequently does not have a
measurable carbon footprint. The Company is categorised as
a low energy user (less than 40MWH) under the Streamlined
Energy & Carbon Reporting regulations and therefore is not
required to disclose any energy and carbon information in this
Annual Report.
Task Force on Climate-Related Financial Disclosures (TCFD)
Product reports of Task Force on Climate-related Financial
Disclosures (TCFD) can be obtained via the Additional
Information section on the Company’s website at
www.fidelity.co.uk/emergingmarkets.
Future Developments
Some trends likely to affect the Company in the future are
common to many investment companies together with the
impact of regulatory change and emerging risks. The factors
likely to affect its future development, performance and position
are set out in the Chairman’s Statement and the Portfolio
Managers’ Review on pages 2 to 8.
On behalf of the Board
Heather Manners
Chairman
5 October 2026
29
Annual Report 2026 | Fidelity Emerging Markets Limited
Heather Manners
Chairman of the Board and Nomination Committee
Appointed 5 May 2022
Appointed Chairman of the Board on8December 2022.
N
Heather Manners (British) is an award-winning market professional with some 34 years’ experience of investment in Asia, most
recently, and for the past 15 years as the co-founder, CEO and CIO of Prusik Investment Management. Heather is also a non-executive
director of Scottish Mortgage Investment Trust and Montanaro Asset Management and previously was a non-Executive Director of
Aberdeen New Dawn and Collidr Asset Management. Heather began her career at Henderson Global Investors Limited where,
latterly, she was Head of Asia and Emerging Markets.
Torsten Koster
Senior Independent Director
Appointed 1 July 2020
A
N
Torsten Koster (Swiss) has over 30 years’ experience working for large multi-national companies. He spent two periods at Nestle
SA (1991-1997 and 2003-2016). During his second term Torsten held the positions of Chief Financial Officer Nestle Russia & Eurasia
between 2007-2011 and Chief Financial Officer Nestle Nespresso SA from 2011-2016. He also held the positions of Chief Financial
Officer at Lukoil SA for three years from 1998-2000 and subsequently at ELCA lnformatique SA between 2000-2003. In 2016 Torsten
founded his own consultancy business, Baussan Concept SA.
Torsten has held a number of Board member roles. Director of SodaStream International from 2016-2018 (NASDAQ:SODA), Vice
Chairman of Natra SA, Spain from 2019-2022 and director of ECOM Agroindustrial SA from 2024 till June 2026. He is Chairman of the
Board of Banque Heritage SA in Geneva which specialises in Wealth Management and Family Office Services. He holds a Masters
degree from HEC Lausanne. Mr Koster resides in Switzerland.
Mark Little
Audit and Risk Committee Chairman
Appointed 17 January 2024
Appointed Chairman of Audit and Risk Committee 17 January 2024
A
N
Mark Little (British) is a Chartered Accountant with extensive financial services experience in fund management, research, and private
banking, and has a strong understanding of compliance and regulation in the modern financial services world.
He is a non-executive Director and Chairman of the audit committees of BlackRock Smaller Companies Trust plc, Majedie Investments
Plc and Abrdn Equity Income Trust plc. Previously Mr Little was a non-executive Director and Chair of the Audit and Risk Committee
of STS Global Income & Growth Trust plc, Managing Director, Scotland & Northern Ireland at Barclays Wealth and Global Head of
Automotive Research at Deutsche Bank. Mr Little has a wealth of experience in the financial services sector and began his career as a
fund manager with Scottish Widows Investment Management after qualifying as a chartered accountant with Price Waterhouse in 1989.
Mr Little is an Accountancy and Economics graduate from Aberdeen University.
Board of Directors
Committee membership key
A
Audit and Risk
N
Nomination
A
Committee Chair
STRATEGYFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE STRATEGY
30
Fidelity Emerging Markets Limited | Annual Report 2026
Board of Directors continued
Katherine Tsang
Director
Appointed 19 July 2017
A
N
Katherine Tsang (Canadian) spent 22 years with Standard Chartered Bank, latterly in the role of Chairperson of Greater China, before
retiring in 2014. Following her retirement, Ms Tsang founded Max Giant that trades in different markets as well as making direct
investments in Asia. Ms Tsang is currently an independent Non Executive Director on the Board of China CITIC Bank International Limited,
Budweiser Brewing Company APAC Limited and Fosun International Limited.
She also serves as a member of the Advisory Council for China of the City of London, and is an honorary Board member of Shanghai
Jiao Tong University. She has previously served as an independent Non-Executive Director of Gap Inc., and Baoshan Iron & Steel Co.
Limited, a member of the World Economic Forum’s Global Agenda Council on China, and a member of Sotheby’s Advisory Board.
Sheisbased in Hong Kong.
Dr Simon Colson
Director
Appointed 1 July 2019
A
N
Dr Simon Colson (British) has over 30 years’ experience in financial markets, working in investment banking, investment management
and financial consulting. From 1995-2001 he was Managing Director, Deutsche Bank AG London, in charge of closed-end fund
origination and distribution, and in previous roles was responsible for the launch, restructuring and repurposing of a significant number
of investment companies. From 2002-2005 he was a non-executive director of The Association of Investment Companies. In 2002 he
founded his own FCA regulated consulting and distribution business which raised assets for emerging managers across a range
of traditional and alternative asset classes (including closed-end funds). In 2017 he relinquished his FCA license to concentrate on
unregulated advisory and non-executive work. He is a qualified Medical Doctor and holds an MBA in Finance & Investment from Bayes
Business School (City St George’s, University of London). Dr Colson resides in the UK.
Committee membership key
A
Audit and Risk
N
Nomination
A
Committee Chair
31
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE STRATEGY
Directors‘ Report
The Directors present their Annual Financial Report of the
Company, covering the year ended 30June 2026.
FINANCIAL PERFORMANCE
The results and reserve movements for the year are set out in the
Statement of Comprehensive Income and Statement of Financial
Position Income on pages 47 and 49 and the Notes to the
Financial Statements on pages 51 to 78.
Results and Dividends
The profit for the year for the Company amounted to $431,803,000,
this compared to a profit of $126,986,000 in the previous year.
An explanation of the Company’s performance is provided in the
Portfolio Managers’ Review on pages 5 to 8.
Corporate Governance
The Corporate Governance Statement forms part of this report and
can be found on pages 33 to 37.
The Directors propose a dividend of $0.33 per Participating
Preference Share in respect of the year ended 30 June 2026
(2025: $0.26). If approved by shareholders at the AGM on
1December 2026, the dividend will be payable on 8 December
2026 to shareholders on the register at close of business on
13November 2026. The ex-dividend date is 12 November 2026.
Capital Values
At 30 June 2026, the value of the Total equity was $864,003,000
(2025: $771,628,000) an increase of $92,375,000 compared to
30 June 2025. The Net Asset Value per Participating Preference
Share was $21.94 (2025: $11.99).
Key Performance Indicators
The Financial Highlights and Performance section pages inside the
front cover show the Company’s Key Performance Indicators including
its performance and discount to its NAV over the last five years.
SHAREHOLDERS
Notifiable Interests in the Company’s Voting Right
During the financial year, the following shareholders declared a notifiable interest in the Company’s voting rights:
Shareholders
Participating Preference
Shares Held
% Shares
held in Issue
Date of
Notification
City of London Investment Management Company Limited 15,146,999 36.95% 18 May 2026
Lazard Asset Management LLC 4,189,137 10.01% 30 March 2026
Allspring Global Investment Holdings, LLC 4,099,940 9.93% 7 May 2026
On 21 October 2025 Saba Capital Management, L.P. notified the Company that it no longer had a notifiable interest in the Company’s
voting rights.
The following updates to notifiable interests in the Company’s voting rights have been declared post the financial year-end:
Shareholder
Participating Preference
Shares Held
% Shares held
in Issue
Date of
Notification
City of London Investment Management Company Limited 13,730,217 36.04 29 September 2026
As at 30 June 2026, the Board is aware of the following significant holdings in the Company:
Shareholders
Participating Preference
Shares Held
% Shares
in Issue
City of London Investment Management Company Limited 14,207,949 36.09
Lazard Asset Management LLC 4,833,904 12.28
Allspring Global Investment Holdings, LLC 3,694,175 9.38
Interactive Investor 2,322,006 5.90
Notes: All of the above % Shares in Issue are calculated based on
the number of shares in issue with voting rights as at 30 June 2026,
being 39,373,155.
In November 2025, the Company completed the repurchase of
a large shareholding (16.4 million shares) from the Strathclyde
Pension Fund, equivalent to roughly 25% of the shares in issue.
These shares were bought back at an agreed 14% discount to NAV
and subsequently cancelled. The transaction led to an immediate
uplift of more than 4.5% in the NAV per share for continuing
shareholders, underlining the Company’s commitment to a fair
outcome for all its investors.
32
Fidelity Emerging Markets Limited | Annual Report 2026
THE TAKEOVER CODE
The Takeover Code (the “Code”) applies to the Company. Under
Rule 9 of the Code, any person who acquires an interest in
shares which, taken together with shares in which that person or
any person acting in concert with that person is interested, carry
30 per cent. or more of the voting rights of a company which is
subject to the Code is normally required to make an offer to all
the remaining shareholders to acquire their shares.
Similarly, when any person, together with persons acting in
concert with that person, is interested in shares which in the
aggregate carry not less than 30 per cent. of the voting rights
of such a company but does not hold shares carrying more
than 50 per cent. of the voting rights of the company, an offer
will normally be required if such person or any person acting
in concert with that person acquires a further interest in shares
which increases the percentage of shares carrying voting rights
in which that person is interested. An offer under Rule 9 must be
made in cash at the highest price paid by the person required to
make the offer, or any person acting in concert with such person,
for any interest in shares of the company during the 12 months
prior to the announcement of the offer.
Under Rule 37.1 of the Code, when a company repurchases its
own voting shares, any resulting increase in the percentage of
shares carrying voting rights in which a person is interested is
treated as an acquisition for the purpose of Rule 9. However,
Note 1 on Rule 37.1 also provides that a person who comes to
exceed the limits in Rule 9.1 in consequence of a company’s
redemption or purchase of its own shares will not normally incur
an obligation to make a mandatory offer unless that person is a
director, or the relationship of the person with any one or more
of the directors is such that the person is, or is presumed to be,
acting in concert with any of the directors.
The Company notes that as at 29 September 2026, City
of London Investment Management Company (“CoL”) (the
Company’s largest shareholder) held 13,730,217 participating
preference shares (being 36 per cent. of the Company’s
aggregate voting share capital as at 30 September 2026).
On the basis that CoL does not have a representative on the
board of the Company and is not acting in concert with any of
the directors The Panel on Takeovers and Mergers (the “Panel”)
has confirmed that the repurchase of shares pursuant to the
general share buyback authority will not trigger an obligation for
CoL under Rule 9 of the Code. If the Company utilised the entire
general share buyback authority proposed to be renewed at the
AGM, CoL will continue to hold more than 30 per cent. but less
than 50 per cent. of the voting share capital of the Company and
therefore may not acquire further shares in the Company without
incurring an obligation under Rule 9 of the Code to make a
general offer to the Company’s other shareholders.
Directors‘ Report continued
33
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE
This Corporate Governance Statement forms part of the Directors’
Report. The Company is committed to maintaining high standards
of corporate governance. Accordingly, the Board has put in
place a framework for corporate governance which it believes is
appropriate for an investment company.
The Board is accountable to shareholders for the governance of
the Company’s affairs. The Directors use this Report to detail the
Company’s corporate governance statement.
The Company is a member of the Association of Investment
Companies (‘AIC’) and the Board has considered the Principles
and Provisions of the AIC Code of Corporate Governance (‘AIC
Code’). The AIC Code addresses the Principles and Provisions
set out in the UK Corporate Governance Code (‘UK Code’), as
well as setting out additional Provisions on issues that are of
specific relevance to the Company.
The Board considers that reporting against the Principles and
Provisions of the AIC Code, which has been endorsed by the
Financial Reporting Council and the Guernsey Financial Services
Commission provides more relevant information to shareholders.
The Company is an Authorised Closed Ended Investment Scheme
regulated by the Guernsey Financial Services Commission
(‘GFSC’). The GFSC requires compliance with the principles
set out in the Finance Sector Code of Corporate Governance
(‘Guernsey Code’), or alternative codes accepted by the GFSC, in
the context of the nature, scale and complexity of the business.
As a Guernsey incorporated company, with a listing of equity
shares in the equity shares (commercial companies) category on
the London Stock Exchange within the FTSE250, the Company
is required to comply with UK Listing Rule6.6.18 (for overseas
companies). This requires the Company to state how it has
applied the main principles set out in the UK Code and whether
it has complied with these provisions throughout the accounting
period. The AIC Code can be found on the AIC’s website at
www.theaic.co.uk and the UK Code on the FRC’s website at
www.frc.org.uk.
Statement of Compliance
The Board confirms that during the year under review, the Company
has complied with the provisions of the AIC Code and therefore,
insofar as they apply to the Company, with the provisions of the UK
Code and Guernsey Code except as noted below.
• The role of Chief Executive
Since all Directors are non-executive and day-to-day
management responsibilities were delegated to the
Manager, Investment Manager, and other third party service
providers, the Company does not have a Chief Executive.
• Executive Directors’ remuneration
As the Board has no executive Directors, it is not required
to comply with the principles of the UK Code in respect
of executive Directors’ remuneration and does not have
aRemuneration Committee.
• Internal audit function
As the Company has no employees and delegates its
day-to-day operations to the Manager, Investment Manager,
and other third party service providers, the Board has
determined that there is no requirement for an internal audit
function. The Directors annually review whether a function
equivalent to internal audit is needed and will continue to
monitor the Company’s systems of internal controls in order to
provide assurance that they operate as intended.
The Board is committed to the continuing compliance with the
AIC Code.
REGULATORY DISCLOSURES
The Alternative Investment Fund Managers Directive(‘AIFMD’)
FIL Investment Services (UK) Limited is organised under the
laws of England and Wales and qualifies as a UK alternative
investment fund manager (‘AIFM’). Article 22 of AIFMD requires
certain qualitative and quantitative disclosures on remuneration
to assist the understanding of the risk profile of the Company.
Details of Fidelity International’s Remuneration Policy during the
year under review and amounts attributable to the Company are
available on page 86.
UK Listing Authority Listing Rules (‘LR’) – compliance with
rule6.6.1
None of the disclosures required under UKLR 6.6.1 are applicable
tothe Company.
Corporate Governance Statement
34
Fidelity Emerging Markets Limited | Annual Report 2026
ANNUAL GENERAL MEETING
This year’s AGM will be held on Tuesday, 1 December 2026 at
8:30 a.m. at the registered office of the Company, Level 3, Mill
Court La Charroterie, St Peter Port, Guernsey GY11EJ. In addition
to the ordinary business to be conducted at the meeting, the
following special business will be proposed:
Special Business – ordinary resolutions – requiring 50%
of votes in favour
Continuation Vote – Resolution 11
The resolution deals with the continuation of the Company as
an investment company for the period expiring at the end of the
AGM of the Company to be held in 2031.
Authority for the Allotment of New Shares – Resolution 12
The resolution provides the Directors with a general authority to
allot securities in the Company up to a maximum of 12,698,994
Participating Preference Shares which represents approximately
33.33% of the issued share capital of the Company (excluding
Treasury Shares) at the latest practicable date of this report, and
to impose any limits or restrictions and make any arrangements
which they consider necessary or appropriate to deal with
Treasury Shares, fractional entitlements, record dates, legal,
regulatory or practical problems in, or under the laws of, any
territory or any other matter. The Directors would not intend to
use this power unless they considered that it was in the interests
of shareholders to do so. Any shares issued would be at NAV per
share or at a premium to NAV per share.
Special Business – special resolutions – requiring 75%
of votes in favour
Authority to purchase own shares – Resolution 13
The Directors are seeking to renew the authority to purchase
shares in the market of up to 38,100,793 Participating Preference
Shares (respectively equivalent to 14.99 per cent. of the issued
number of Participating Preference Shares (excluding shares held
in treasury) at the date of this document or, if lower, such number
as is equal to 14.99% of the issued number of Participating
Preference Shares (excluding shares held in treasury) at the date
of passing the resolution).
The maximum price which may be paid for a Participating
Preference Share is an amount equal to 105% of the average of
the middle market quotations for a Participating Preference Share
taken from the London Stock Exchange Daily Official List for the
five business days immediately preceding the day on which the
Participating Preference Share is purchased.
The authority hereby conferred shall expire at the conclusion of
the Annual General Meeting of the Company to be held in 2027
unless such authority is renewed prior to such time.
The Company may make a contract to purchase Participating
Preference Shares under the authority hereby conferred prior to
the expiry of such authority which will or may be executed wholly
or partly after the expiration of such authority and may make
a purchase of Participating Preference Shares pursuant to any
suchcontract.
Authority to Disapply Pre-Emption Rights – Resolution 14
Resolution 14 disapplies the pre-emption rights contained in the
Articles so that the Board has authority to allot and issue (or
sell from treasury) shares for cash on a non-pre-emptive basis in
respect of 3,810,079 Participating Preference Shares (equivalent
to 10 per cent. of the Participating Preference Shares in issue as
at the latest practicable date prior to the date of publication of
this document (excluding in each case shares held in treasury).
The disapplication expires on the date falling fifteen months after
the date of passing of Resolution 14 or the conclusion of the next
annual general meeting of the Company, whichever is the earlier
and permits the Board to allot and issue shares (or sell shares
from treasury) after expiry of the disapplication if it has agreed to
do so beforehand. Shares issued (or sold from treasury) pursuant
to the disapplication would not be issued at a price that is less
than the prevailing net asset value per share of the relevant class.
The resolution to approve disapplication of pre-emption rights in
respect of issues of shares for cash is set at 10 per cent. of the
Participating Preference Shares in issue (excluding shares held
in treasury). As the issue of such shares (or sale from treasury)
by the Company on a non-pre-emptive basis is subject to the
additional qualification that the relevant shares must be issued
for a price at least equal to the prevailing net asset value for
the relevant class of shares, the Board believes that the existing
authority to issue new shares for cash equal to 10 per cent. of the
Participating Preference Shares in issue (excluding shares held in
treasury) is appropriate.
The Directors have no present intention to exercise the authority
conferred by Resolution 14.
Changes to Articles of Association – Resolution 15
Resolution 15 is a special resolution regarding amendments to
the Articles of Incorporation (“the Articles”) by the Company.
Article 17 – Calculation of net asset value
The Board is proposing to amend article 17 relating to
calculation of net asset values. The current articles include the full
methodology for the calculation of the net asset value, and the
Board is proposing to align with market practice and simplify the
content. The updated article 17 confirms that the net asset value
will be calculated in accordance with such valuation policies,
methodologies and procedures as are approved by the Directors
from time to time and where applicable the methodology shall
be in accordance with applicable accounting standards and
regulatory requirements. However, there is no current intention
of changing the methodology for the calculation. The revised
wording also allows use of the UK time zone for calculations
(rather than being required to calculate the value as at close
of business in Guernsey) for greater efficiency in calculating
and releasing the net asset value to the market, and confirms
the ability for the Directors to rely on a third-party appointed to
perform the calculation.
Corporate Governance Statement continued
35
Annual Report 2026 | Fidelity Emerging Markets Limited
FINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE STRATEGY
Corporate Governance Statement continued
Definition – Valuation Day
The Board is also proposing to update the definition of
“Valuation Day” to mean such day or days as the Directors may
determine from time to time for the purpose of calculating the net
asset value of the Company. In practice the Board has no plans
to change its approach of announcing the net asset value daily.
A copy of the proposed amended Articles showing all the
changes as against the current Articles of Association is available
for inspection at https://investment-trusts.fidelity. co.uk/fidelity-
emerging-markets-limited/, together with a copy of the current
Articles of Incorporation and a ‘clean’ copy of the Articles (which
do not highlight the amendments), from the date of this report
until the end of the AGM (and at the AGM itself for the duration
of the meeting and for at least 15 minutes prior to the meeting).
The documents are also available for inspection at Simmons &
Simmons LLP, Citypoint, 1 Ropemaker Street, London, EC2Y9SS
until the close of the AGM.
Authority to call General Meetings on 14 clear days’ notice –
Resolution 16
Resolution 16 is a special resolution to provide the Company with
authority to call general meetings (other than annual general
meetings) on 14 clear days’ notice. The Directors believe that
the flexibility provided by this resolution is beneficial to the
Company when dealing with any matters that require the prompt
consideration by shareholders
Recommendation
The Board considers that the passing of all resolutions being
put to the Company’s AGM would be in the best interest of
the Company and its shareholders as a whole. It therefore
recommends that shareholders vote in favour of resolutions 1 to
16, as set out in the Notice of Annual General Meeting.
THE BOARD
Board Composition
As at the date of this report, the Board, chaired by Heather Manners,
consists of five non-executive Directors. The Directors believe that,
between them, they have good knowledge and wide experience of
business in the emerging markets region, unlisted investments and
their valuations, and of investment companies, and that the Board
has an appropriate balance of skills, experience, independence
and knowledge of the Company and length of service to discharge
its duties and provide effective strategic leadership and proper
governance of the Company.
Torsten Koster is the Senior Independent Director and fulfils the role
as a sounding board for the Chairman, intermediary for the other
Directors as necessary and acts as a channel of communication
for shareholders in the event that contact through the Chairman is
inappropriate. Biographical details of all Directors are on pages 29
and 30.
Training, Development and Board Evaluation
On appointment, Directors receive a full, formal and tailored
induction. Directors are also regularly provided with key information
on the Company’s policies, regulatory and statutory requirements
and internal controls. Changes affecting Directors’ responsibilities
are advised to the Board as they arise. Directors also regularly
participate in relevant training and industry seminars. Training and
development needs are considered as part of the evaluation process
and are agreed with the Chairman.
The Board evaluates its performance on an annual basis and
considers the balance of skills, experience, length of service and the
promotion of diversity and inclusion as part of this process.
This process is considered to be constructive in terms of identifying
areas for improving the functioning and performance of the Board
and its Committees and action is taken on the basis of the results.
Itwas concluded that the Chairman, each Director and the Manager
had been effective and continues to demonstrate commitment to
their roles.
In accordance with the AIC Code, consideration is given to the
engagement of an external evaluator on a regular basis. An
independent review of the Board’s performance was conducted
in February 2026 by Stephenson Executive Search Ltd. The next
independent Board review is due to be conducted in 2029.
The Directors consider that since they do not have executive
roles, it is not necessary to establish a separate Remuneration
Committee. There is also no separate Management Engagement
Committee as the Board, as a whole, regularly meets with the
Manager, the Administrator and the Company Secretary to discuss
theirperformance.
The Board regularly reviews both the performance of, and the
contractual arrangements with FIL Investments International as
Investment Manager. The Management Agreement sets out
matters over which Fidelity International has authority and includes
management of the Company’s assets and the provision of
administrative duties.
The Board reviews the performance of, and the contractual
arrangements with the Administrator and the Custodian. The Board is
satisfied that the continuing appointment of the Administrator and the
Custodian is in the best interests of shareholders.
The Board meets at least four times during the year and between
these meetings there is regular contact with the Company
Secretary, FIL Investments International, who provides the Board
with appropriate and timely information. Attendance at those
meetings is shown on on page 36.
36
Fidelity Emerging Markets Limited | Annual Report 2026
Board’s Attendance Record for the Reporting Year
Regular
Board
Meetings
Audit and
Risk
Committee
Meetings
Nomination
Committee
Meetings
Heather Manners 5/5 3/3
(1)
2/2
Dr Simon Colson 5/5 3/3 2/2
Torsten Koster 5/5 3/3 2/2
Mark Little 5/5 3/3 2/2
Katherine Tsang 5/5 3/3 2/2
(1) Attended the Audit and Risk Committee by invitation but is not a Committee member.
Board Responsibilities
The Board has overall responsibility for the Company’s affairs
and for promoting the long-term success of the Company. All
matters which are not delegated to the Company’s Investment
Manager under the Management Agreement are reserved
for the Board’s decision. Matters reserved for the Board
and considered at meetings include decisions on strategy,
management, structure, capital, share issues, share repurchases,
gearing, financial reporting, risk management, investment
performance, share price discount, corporate governance,
Board appointments, and the appointment of the Investment
Manager and Company Secretary. The Board also considers
shareholder issues including communication and investor
relations. All Directors are independent of the Investment
Manager and considered to be free from any relationship which
could materially interfere with the exercise of their independent
judgement. The Board follows a procedure of notification of other
interests that may arise as part of considering any potential
conflicts and is satisfied that none has arisen in the year under
review. All Directors are able to allocate sufficient time to the
Company to discharge their responsibilities fully and effectively.
Each Director is entitled to take independent professional advice,
at the Company’s expense, in the furtherance of their duties.
Directors’ Insurance and Indemnification
Directors’ and Officers’ liability insurance cover is held by the
Company to cover Directors against certain liabilities that may
arise in the course of their duties.
Tenure Policy
Directors appointed to the Board are subject to election and
subsequent annual re-election by shareholders at Annual
General Meetings and normally serve a term of up to nine years
fromelection.
Company Secretary and Administrator
FIL Investments International is appointed as Company Secretary
and JP Morgan Administration Services (Guernsey) Limited is the
Company’s Administrator. Both have been in office for the whole
year under review.
Board Meetings
The Board considers that it meets sufficiently regularly to
discharge its duties effectively and the table below gives the
attendance record for the meetings held during the reporting
year. The Portfolio Manager and key representatives of the
Investment Manager are in attendance at these meetings.
OTHER MATTERS
Voting Policy
The Board has authorised Fidelity to exercise the
Company’svoting rights in respect of resolutions
proposedbyinvesteecompanies.
Details of Fidelity’s voting policy can be found at
www.fidelity.co.uk/responsible-investing.
Borrowing Facilities
The Articles of Incorporation permit the Company to borrow up to
10% of the value of its Net Assets. No borrowing facility was used
in either 2025 or 2026.
Discount/Premium to Net Asset Value
The Board reviews the level of the discount or premium between
the market price of the Company’s Participating Preference
Shares and their net asset value on a regular basis.
European Union
The Company is a Guernsey based authorised closed-ended
investment company listed in the UK and traded on the London
Stock Exchange.
The European Securities and Markets Authority (‘ESMA’) has
approved the co-operation arrangements between the FCA
andGFSC.
Corporate Governance Statement continued
37
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE
Going Concern
The Financial Statements of the Company have been prepared
on a going concern basis.
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.
The Directors, having considered the liquidity of the Company’s
portfolio of investments (being mainly securities which are readily
realisable) stress testing performed 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 continue in operational existence
for the foreseeable future. The Board has therefore concluded
that the Company has adequate resources to continue to adopt
the going concern basis for the period to 31 October 2027
which is at least twelve months from the date of approval of the
FinancialStatements.
The Company, in accordance with the provisions of its Articles of
Incorporation, is subject to a continuation vote by shareholders
at the Annual General Meeting to be held on 1 December 2026.
Atthis stage, the Directors believe that it is likely shareholders will
vote in favour of continuation. As highlighted in the Chairman’s
statement, this conclusion is based on the Company’s NAV total
return performance beating the Index by +44.1 percentage
points this year and by 5.5 percentage points in both of the two
preceding years. The share price outperformance versus the Index
was 51.3 percentage points in year under review and share price
outperformed the Index by 7.7 and 9.4 percentage points in the
two preceding years. The Board is encouraged by the growing
interest in emerging markets as an asset class, the relative
level of the Company’s discount versus peers remains good,
and the excellent performance of the Fidelity emerging market
open ended fund which replicates the closed end fund, and
has a longer track record, with the same portfolio management
team is strong. There is a continuation vote scheduled to take
place at the AGM, there are no indications from shareholders
that they will vote against the continuation of the Company. The
Directors have concluded that despite the continuation vote the
preparation of the Financial Statements on a going concern basis
remainsappropriate.
The prospects of the Company over a period longer than twelve
months can be found in the Viability Statement on page 26.
Signed on behalf of the Board
Heather Manners
Chairman
5 October 2026
Corporate Governance Statement continued
38
Fidelity Emerging Markets Limited | Annual Report 2026
The Directors of the Company are non-executive and by way of
remuneration are entitled to receive fees for their services which
shall not exceed $450,000 in the aggregate, exclusive of relevant
expenses, in aggregate per annum. This was approved by
shareholders at the AGM on 1 December 2025 and can only be
amended by shareholder approval at a general meeting.
Directors’ Remuneration
The annual fee structure with effect from 1 July 2026 is as follows:
Chairman – £65,000 (2025: £60,000); Senior Independent Director
– £45,000 (2025: £42,000); Audit and Risk Committee Chairman –
£50,000 (2025: £45,000); and Director – £42,500 (2025: £40,000).
Directors’ remuneration is reviewed on an annual basis to ensure that
it remains competitive and sufficient to attract and retain the quality
of directors needed to manage the Company successfully, and to
reflect the increased workload of investment company directors.
Other than fees and reasonable out-of-pocket expenses incurred
in attending to the affairs of the Company, the Directors are not
eligible for any performance related pay or benefits, pension
related benefits, share options, long-term incentive schemes or other
taxablebenefits.
The Directors are not entitled to exit payments and are not provided
with any compensation for loss of office. Directors fees are paid
quarterly in arrears. Directors would not serve a notice period if
their appointment were to be terminated. An ordinary resolution
to approve the Directors’ Remuneration Report will be put to
shareholders at the AGM on 1 December 2026.
Directors’ Service Contracts
No Director has a contract of service with the Company.
Accordingly, the Directors are not entitled to any compensation
in the event of termination of their appointment or loss of office,
other than the payment of any outstanding fees. The Board does
not consider it appropriate that Directors should be appointed
for a specific term. All Directors are subject to re-election by
shareholders annually A new Director appointed would be
subject to election by shareholders at the next AGM following
their appointment.
Directors’ Emoluments for the Year
The fees paid to each Director for the years ended 30 June 2026
and 2025 are shown in the table below with any year-on-year
differences being explained:
30 June 2026 30 June 2025
Heather Manners £60,000 £52,000
Torsten Koster £42,000 £39,500
Mark Little £45,000 £39,500
Dr Simon Colson £40,000 £37,500
Katherine Tsang £40,000 £37,500
£227,000 £206,000
US$ equivalent $302,000 $274,000
No additional fees or expenses were paid to Directors in respect
of the financial year ended 30June 2026.
Directors’ Interests
The following Directors had a beneficial interest (including family
interests) in the share capital of the Company. The table shows
the number of Participating Preference Shares held by each
Director as at 30 June 2026 and 2025:
Director 30 June 2026 30 June 2025
Heather Manners 10,000 10,000
Torsten Koster 15,000 15,000
Mark Little
(1)
4,009 2,850
Dr Simon Colson 4,416 4,416
Katherine Tsang
(2)
58,000 8,000
(1) 1,019 shares acquired on 8 October 2025. 140 shares acquired via the DRIP on
14 December 2025.
(2) 16,000 shares acquired on 16 March 2026, 16,000 shares acquired on 18 March
2026 and 18,000 shares acquired on 19 March 2026.
AGM Resolution
An ordinary resolution to approve this Remuneration Report will be put to shareholders at the forthcoming AGM.
Statement of voting at the last AGM
The following table sets out the votes received at the AGM of the shareholders of the Company, held on 1 December 2025 in respect
of the approval of the Directors’ Remuneration Report.
Votes cast for Votes cast against
Total votes cast
Number of
votes withheldNumber % Number %
35,991,790 99.98 8,834 0.02 36,000,624 338
For and on behalf of the Board
Heather Manners
Chairman
5 October 2026
Directors‘ Remuneration Report
39
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE
Statement of Directors‘ Responsibilities
The Directors are responsible for preparing the Annual Financial
Report in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance
with International Financial Reporting Standards as issued by the
International Accounting Standards Board and adopted in the
United Kingdom.
Under company law the Directors must not approve the financial
statements unless they are satisfied that taken as a whole, they
give a true and fair view of the state of affairs of the Company
and of its profit or loss for that period. In preparing these
financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• assess the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
• use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Company and enable them to
ensure that its financial statements comply with the Companies
(Guernsey) Law, 2008. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Company and to prevent and detect fraud and
other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in Guernsey governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions. The work carried out by the
auditor does not include consideration of the maintenance and
integrity of the website and, accordingly, the auditor accepts no
responsibility for any changes that have occurred to the accounts
when they are presented on the website.
The Directors who hold office at the date of approval of the
Directors’ Report confirm that so far as they are aware, there is
no relevant audit information of which the Company’s auditor
is unaware, and that each Director has taken all the steps he/
she ought to have taken as a Director to make himself or herself
aware of any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Responsibility statement of the Directors in respect of the
Annual Report
The Directors confirm that to the best of their knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company; and
• the Chairman’s statement, Strategic Report and Portfolio
Managers’ Review includes a fair review of the development
and performance of the business and the position of the
Company, together with a description of the principal and
emerging risks and uncertainties that the Company faces.
The Directors consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s
performance, business model and strategy.
There were no instances where the Company is required to make
disclosures in respect of UK Listing Rule 6.6.1 during the financial
period under review.
For and on behalf of the Board
Heather Manners
Chairman
5 October 2026
40
Fidelity Emerging Markets Limited | Annual Report 2026
I am pleased to present the formal report of the Audit and Risk
Committee (the “Committee”) to shareholders. The primary
responsibilities of the Committee are to ensure the integrity
of the Company’s financial reporting, the appropriateness of
the risk management and internal controls processes and the
effectiveness of the independent audit process and how this has
been assessed for the year ended 30 June 2026.
The Board established the Committee which consists of all
Directors, with the exception of the Chairman, Heather Manners.
The Committee is chaired by Mark Little.
The Committee has formally delegated duties and responsibilities
with written Terms of Reference, which are available on the
Company’s website.
Role and Responsibilities of the Committee
The Committee’s authority and duties are clearly defined in its
terms of reference which are available on the Company’s pages of
the Manager’s website at www.fidelity.co.uk/emergingmarkets.
These duties include:
• To monitor the integrity of the financial statements of the
Company, including its annual and half-yearly reports
andany other formal announcement relating to its
financialperformance;
• To review the Company’s accounting policies and any
significant financial reporting judgements;
• To monitor and review the adequacy and effectiveness of the
internal financial control and risk management systems on
which the Company is reliant;
• To review and approve statements to be included in the Annual
Financial Report concerning controls and risk management;
• To report to the Board that they have carried out a robust
assessment of the principal and emerging risks facing
theCompany;
• To provide advice to the Board on whether they consider the
Annual Financial Report, taken as a whole, is fair, balanced
and understandable;
• To make recommendations to the Board in relation to the
appointment, re-appointment and removal of external auditors;
• To monitor the independence and objectivity of external
auditors; and
• To review the audit fees, terms of engagement and provision
of non-audit services by the external auditor.
The Committee usually meets three times a year to review the
Annual and Half Year Financial Reports, audit timetable and
other risk management and governance matters. Itmay meet
more often if deemed necessary, or if required by the Company’s
auditors.
Significant accounting matters
During the review of the Company’s financial statements for the year ended 30 June 2026, the Audit and Risk Committee considered
the following matters to be significant issues, both of which were satisfactorily addressed:
Issue considered How the issue was addressed
Valuation, existence
and ownership of
investments (including
derivatives and
unlisted investments)
The valuation of
investments (including
derivatives and
unlisted investments)
is in accordance with
Accounting Policy
Note2(b) on pages 52
to 54.
The Committee took comfort from the Custodian’s reports that investment related activities are conducted
in accordance with the Company’s investment policy. The Committee received reports from FIL Investment
Services (UK) Limited the appointed Alternative Investment Fund Manager (“Manager”) and J.P. Morgan
Administration Services (Guernsey) Limited the appointed administrator (“Administrator”), which concluded
that controls around the valuation, existence and ownership of investments operate effectively. The valuation
of the Company’s unlisted, suspended, and illiquid investments which are subject to fair value oversight by
the Manager’s Fair Value Committee (“FVC”) were reviewed by the Committee. It receives reporting from the
FVC and reviews the proposed valuation methodology to be adopted.
Specifically, there are a number of current factors impacting the Company’s Russian investments, such as
markets being closed or with restrictions on trading in certain instruments or with certain counterparties
due to the imposition of sanctions: at the period-end appropriate fair value adjustments to these Russian
investments have been made as proposed by the FVC.
Report of the Audit and Risk Committee
41
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE
Report of the Audit and Risk Committee continued
Auditor independence and assessment
The Committee monitors the European and U.K. legislation
regarding mandatory audit firm rotation and tendering to ensure
compliance and an external tender was conducted in2023.
As part of its review of the continuing appointment of the Auditor,
the Committee considered the independence of the Auditor along
with the effectiveness of the audit. The Auditor was asked to attest
that KPMG Audit Limited (“KPMG”) and the audit team members
were independent of the Company. KPMG also confirmed that they
had not been engaged in the provision of any non-audit services
to the Company during the year. Audit effectiveness was assessed
by means of the Auditors’ direct engagement with the Board at
Committee meetings and also by reference to feedback from the
Manager and Administrator. The Committee reviewed the Auditor’s
risk assessment and audit approach at the planning stage and
were briefed on the fulfilment of that plan at the completion
stage. The Board confirmed, following the recommendation of
the Committee, that the Auditors continued to be independent of
theCompany.
The Audit Quality Review Team of the FRC performed a review
of the audit of the Company for the year ended 30 June 2025
for which there were no significant findings. In the opinion of the
Committee, the outcome was satisfactory, which provides further
comfort regarding KPMG’s audit process.
Auditors Appointment and Tenure
KPMG was re-appointed as the Company’s Auditor (“the
Auditor”) on 1December 2025. From 1 October 2025, KPMG
Channel Islands Limited changed its name to KPMG Audit
Limited. The Committee has reviewed the Auditor’s independence
and the effectiveness of the audit process prior to recommending
its reappointment for a further year. The Auditor is required to
rotate audit partners every five years and this is the fourth year
that the Audit Partner, Rachid Frihmat, has been in place. The
Committee will continue to review the Auditor’s appointment each
year to ensure that the Company is receiving an optimal level
of service. There are no contractual obligations that restrict the
Company’s choice ofauditor.
Audit Fees
The fees paid to KPMG in respect of audit services for the year
ended 30 June 2026 were $116,000 (2025: $116,000). KPMG did
not provide any non-audit services during the year (2025: None).
Internal Controls
The Board is responsible for the Company’s system of internal
control and for reviewing its effectiveness.
As there is delegation of daily operational activity, described
below, there is no requirement for a direct internal audit function.
The internal control systems are designed to meet the Company’s
particular needs and the risks to which it is exposed. Accordingly,
the internal control systems are designed to manage rather than
eliminate the risk of failure to achieve business objectives and
by their nature can only provide reasonable and not absolute
assurance against misstatement and loss.
The services provided to the Company by the Administrator,
such as administration services, and accounting services reflect
the system of financial and operating controls operating at the
Administrator. The control regime for other services, such as
the Manager, Investment Manager, Custodian and Registrar,
reflect the internal controls operated by these respective service
providers.
The Administrator provides semi-annual and annual financial
statements based on the requirements of the Company. The
financial statements are based on data from the Administrator’s
accounting system including the trial balance, net asset valuation,
purchase and sales report and other investment schedules. All
statements are reconciled and reviewed by the Administrator
using pre-defined checklists and reviewed by the Manager prior
to distribution.
In order for the Directors to review their effectiveness for the
Company’s business, an annual review of all outsourced functions
has taken place. Their performance was monitored against
obligations specified in the relevant contracts and was found to
be in order.
Service providers report annually on the design and effectiveness
of internal controls operating over the functions provided. Reports
are reviewed by the Committee and any material findings are
considered by the Board.
The Committee has carried out its annual assessment of the
internal controls of the Company’s service providers for the
year ended 30 June 2026 and considered the internal control
procedures to be adequate based on the findings of their
respective ISAE 3402 SOC 1 Reports or AAF Reports.
For and on behalf of the Committee
Mark Little
Chairman of the Audit and Risk Committee
5 October 2026
42
Fidelity Emerging Markets Limited | Annual Report 2026
The Board has an established Nomination Committee which
consists of all Directors, chaired by Heather Manners.
The Nomination Committee has formally delegated duties
and responsibilities with written Terms of Reference, which
are available on the Company’s website www.fidelity.co.uk/
emergingmarkets.
The responsibilities of the Nomination Committee are inter alia:
• To regularly review the structure, size and composition
(including the length of service of the Board members, skills,
knowledge, experience and diversity) of the Board and make
recommendations to the Board with regard to any changes.
• To give full consideration to succession planning for Directors,
taking into account the challenges and opportunities facing
the Company, the skills and expertise needed on the Board
in the future and the promotion of diversity of gender, social
and ethnic backgrounds, cognitive and personal strengths.
• To be responsible for identifying and nominating, for the
approval of the Board, candidates to fill Board vacancies as
and when they arise and for overseeing the development of
a diverse pipeline for succession.
Diversity
It is seen as a prerequisite that each member of the Board must
have the skills, experience and character that will enable them
to contribute to the effectiveness of the Board and the success
of the Company. Subject to that overriding principle, diversity of
experience and approach, including gender diversity, amongst
Board members is of great value, and it is the Board’s policy to
give careful consideration to overall Board balance and diversity
in making new appointments to the Board.
Composition and independence
As at 30 June 2026 the Board comprised of three male and two
female Directors. All Directors are non-executive and independent
of both the Company and the Investment Manager. Each Director
is required to disclose any potential conflicts of interest at each
Boardmeeting.
Tenure and Succession Planning
The policy on Board refreshment is to ensure continuity and
stability with no more than one Board member retiring and
one successor recruited in each calendar year. In line with the
AIC Code guidelines for independent Directors, individuals
will generally serve on the Board for no more than nine years,
although the Chairman’s term of office may be extended by a
maximum of three additional years to a total of twelve years.
Inrecruiting new Directors, the aim will always be to preserve or
enhance the skill sets on the Board, taking account of the need to
ensure age, gender and ethnic diversity.
Board re-election and appointments
The Nomination Committee makes recommendations to the Board
for the continuation or cessation of service of Directors and reviews
the tenure of Directors on a three year cycle. It also considers the
election and re-election of Directors ahead of each AGM.
When appointing a new Director, the Board takes care to ensure
that the new Director enhances the balance of skills, diversity
and experience appropriate to the requirements of the Company
and that a new Director has enough time available to properly
fulfil their duties. All new Directors undertake a formal induction
and onboarding process. The Directors also have access, where
necessary in the furtherance of their duties, to independent
professional advice at the Company’s expense. Directors are
initially appointed until the following Annual General Meeting
when, under the Company’s Articles of Incorporation, it is required
that they be elected by shareholders.
All the Directors, save for Katherine Tsang, are retiring in
accordance with the AIC Code and will offer themselves for
re-election. Katherine Tsang has indicated her intention to retire,
and will not stand for re-election at the 2026 AGM. As each
Director has maintained their effectiveness and commitment to
the Company, the Board endorses them and recommends their
re-election toshareholders.
Heather Manners
Chairman of the Nomination Committee
5 October 2026
Nomination Committee’s Report
43
Annual Report 2026 | Fidelity Emerging Markets Limited
Our opinion is unmodified
We have audited the financial statements of Fidelity Emerging
Markets Limited (the “Company”), which comprise the statement
of financial position as at 30 June 2026, the statements of
comprehensive income, changes in equity and cash flows for
the year then ended, and notes, comprising material accounting
policies and other explanatory information.
In our opinion, the accompanying financial statements:
• give a true and fair view of the financial position of the
Company as at 30 June 2026, and of the Company’s financial
performance and cash flows for the year then ended;
• are prepared in accordance with International Financial
Reporting Standards as adopted by the EU; and
• comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Ourresponsibilities are described below. We have fulfilled
our ethical responsibilities under, and are independent of
the Company in accordance with, UK ethical requirements
including the FRC Ethical Standard as required by the Crown
Dependencies’ Audit Rules and Guidance. We believe that the
audit evidence we have obtained is a sufficient and appropriate
basis for our opinion.
Key audit matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified
by us, including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. In
arriving at our audit opinion above, the key audit matter was as
follows (unchanged from 2025):
Valuation of Investments
at fair value through
profit or loss, and
derivatives assets and
liabilities The risk Our response
Investments at fair value
through profit or loss
(excluding Investee
funds): $759,695,000;
(2025: $708,476,000)
Derivative assets:
$41,149,000; (2025:
$15,006,000)
Derivative liabilities:
$22,142,000;
(2025:$15,784,000)
Refer to the report
of the Audit and Risk
Committee on page
40, accounting policy
note 2(b) and 2(r), and
notes10, 11 and 17.
Basis:
The Company’s investments consist primarily of listed
equity securities from emerging markets and derivative
instrument assets and liabilities (“Investments”).
As at 30 June 2026, the Company had invested the
equivalent of $759,695,000 (2025: $708,476,000) in
listed equity securities, as well as $41,149,000 (2025:
$15,006,000) in derivative assets and $22,142,000 (2025:
$15,784,000) in derivative liabilities. These Investments,
carried at fair value, are valued by the Company based
on prices obtained from third party pricing providers.
Risk:
The valuation of the Company’s Investments, given that
it represents the majority of the Company’s net assets, is
considered to be the area which has the greatest effect
on our overall audit strategy and allocation of resources
in planning and completing our audit.
Our audit procedures included:
Internal Controls:
We evaluated the design and implementation of
key controls over the valuation of Investments.
Use of KPMG Valuation Specialists:
We engaged our KPMG valuation specialist
to independently price the Investments to third
party pricing sources.
Assessing disclosures:
We also considered the Company’s valuation
policies adopted in note 2(b) and the Company’s
disclosures (see note 2(r)) in relation to the use
of estimates and judgements regarding the
valuation of Investments and in addition the fair
value disclosures in note 17 for compliance with
IFRS as adopted by the EU.
Our application of materiality and an overview of the scope
of our audit
Materiality for the financial statements as a whole was set at
$17.3m (2025: $15.4m), determined with reference to a benchmark
of net assets of $864.0m, of which it represents approximately 2%
(2025: 2%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial misstatements
in individual account balances add up to a material amount across
the financial statements as a whole. Performance materiality for
the Company was set at 75% (2025: 75%) of materiality for the
financial statements as a whole, which equates to $12.9m (2025:
$11.5m). We applied this percentage in our determination of
performance materiality because we did not identify any factors
indicating an elevated level of risk.
Independent Auditor‘s Report to the Members
of Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL GOVERNANCE
44
Fidelity Emerging Markets Limited | Annual Report 2026
Independent Auditor‘s Report to the Members
of Fidelity Emerging Markets Limited continued
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding $864k (2025: $770k), in
addition to other identified misstatements that warranted reporting
on qualitative grounds.
Our audit of the Company was undertaken to the materiality
level specified above, which has informed our identification of
significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the
Company’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that
could have cast significant doubt over its ability to continue as a
going concern for at least a year from the date of approval of the
financial statements (the “going concern period”).
In our evaluation of the directors’ conclusions, we considered the
inherent risks to the Company’s business model and analysed
how those risks might affect the Company’s financial resources or
ability to continue operations over the going concern period.
The risks that we considered most likely to affect the Company’s
financial resources or ability to continue operations over this
periodwere:
• Availability of capital to meet operating costs and other
financial commitments; and
• The likelihood of the 2026 continuation vote passing.
We considered whether these risks could plausibly affect the
liquidity in the going concern period by comparing severe, but
plausible downside scenarios that could arise from this risk
individually and collectively against the level of available financial
resources indicated by the Company’s financial forecasts. We also
considered the risk that the outcome of the continuation vote due to
take place at the Annual General Meeting in 2026 could affect the
Company over the going concern period, by considering outcomes
of previous continuation votes and considering key financial metrics
including the Company’s share price relative to its reported net
asset value per share over the past 12 months.
We considered whether the going concern disclosure in note 2(a)
to the financial statements gives a full and accurate description of
the directors’ assessment of going concern.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is
appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast
significant doubt on the the Company’s ability to continue as
a going concern for the going concern period; and
• we have nothing material to add or draw attention to
in relation to the directors’ statement in the notes to the
financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast
significant doubt over the Company’s use of that basis for
the going concern period, and that statement is materially
consistent with the financial statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Company will
continue in operation.
FRAUD AND BREACHES OF LAWS AND REGULATIONS –
ABILITY TO DETECT
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive
or pressure to commit fraud or provide an opportunity to commit
fraud. Our risk assessment procedures included:
• enquiring of management as to the Company’s policies and
procedures to prevent and detect fraud as well as enquiring
whether management have knowledge of any actual,
suspected or alleged fraud;
• reading minutes of meetings of those charged with
governance; and
• using analytical procedures to identify any unusual or
unexpected relationships.
As required by auditing standards, we perform procedures
to address the risk of management override of controls, in
particular the risk that management may be in a position to make
inappropriate accounting entries. On this audit we do not believe
there is a fraud risk related to revenue recognition because the
Company’s revenue streams are simple in nature with respect to
accounting policy choice, and are easily verifiable to external data
sources or agreements with little or no requirement for estimation
from management. We did not identify any additional fraud risks.
We performed procedures including
• Identifying journal entries and other adjustments to test
based on risk criteria and comparing any identified entries to
supporting documentation; and
• incorporating an element of unpredictability in our audit
procedures.
45
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL GOVERNANCE
Independent Auditor‘s Report to the Members
of Fidelity Emerging Markets Limited continued
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussion
with management (as required by auditing standards), and from
inspection of the Company’s regulatory and legal correspondence,
if any, and discussed with management the policies and
procedures regarding compliance with laws and regulations. As
the Company is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
The Company is subject to laws and regulations that directly affect
the financial statements including financial reporting legislation
and taxation legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on the
related financial statement items.
The Company is subject to other laws and regulations where
the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or impacts
on the Company’s ability to operate. We identified financial
services regulation as being the area most likely to have such
an effect, recognising the regulated nature of the Company’s
activities and its legal form. Auditing standards limit the required
audit procedures to identify non-compliance with these laws
and regulations to enquiry of management and inspection of
regulatory and legal correspondence, if any. Therefore if a breach
of operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remains a higher risk of
non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual report
but does not include the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does
not cover the other information and we do not express an audit
opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
DISCLOSURES OF EMERGING AND PRINCIPAL RISKS AND
LONGER TERM VIABILITY
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ disclosures in
respect of emerging and principal risks and the viability statement,
and the financial statements and our audit knowledge. We have
nothing material to add or draw attention to in relation to:
• the directors’ confirmation within the Viability Statement
(page 26) that they have carried out a robust assessment
of the emerging and principal risks facing the Company,
including those that would threaten its business model, future
performance, solvency or liquidity;
• the emerging and principal risks disclosures describing
these risks and explaining how they are being managed
ormitigated;
• the directors’ explanation in the Viability Statement (page26)
as to how they have assessed the prospects of the Company,
over what period they have done so and why they consider
that period to be appropriate, and their statement as
to whether they have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on
page 26 under the Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially
consistent with the financial statements and our audit knowledge.
Corporate governance disclosures
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ corporate
governance disclosures and the financial statements and our
auditknowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
• the directors’ statement that they consider that theannual
report and financial statements taken as a whole is fair,
balanced and understandable, and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy;
46
Fidelity Emerging Markets Limited | Annual Report 2026
Independent Auditor‘s Report to the Members
of Fidelity Emerging Markets Limited continued
• the section of theannual report describing the work of the
Audit Committee, including the significant issues that the audit
committee considered in relation to the financial statements,
and how these issues were addressed; and
• the section of the annual report that describes the review of
the effectiveness of the Company’s risk management and
internal control systems.
We are required to review the part of Corporate Governance
Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified by
the Listing Rules for our review. We have nothing to report in
thisrespect.
We have nothing to report on other matters on which we are
required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law, 2008 requires us to report
to you if, in our opinion:
• the Company has not kept proper accounting records; or
• the financial statements are not in agreement with the
accounting records; or
• we have not received all the information and explanations,
which to the best of our knowledge and belief are necessary
for the purpose of our audit.
RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities
As explained more fully in their statement set out on page 39,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and
fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing
the Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend
to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue our opinion in an auditor’s report. Reasonable assurance
is a high level of assurance, but does not guarantee that an
audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the
financialstatements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by
persons other than the Company’s members as a body
This report is made solely to the Company’s members, as
a body, in accordance with section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so
that we might state to the Company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Rachid Frihmat
For and on behalf of KPMG Audit Limited
Chartered Accountants and Recognised Auditors
Guernsey
5 October 2026
47
Annual Report 2026 | Fidelity Emerging Markets Limited
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
The notes on pages 51 to 78 form an integral part of these financial statements
Year ended 30 June 2026 Year ended 30 June 2025
Note
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
Investment income 3 18,866 – 18,866 22,941 – 22,941
Derivative income 3 25,347 – 25,347 26,855 – 26,855
Other income 3 963 – 963 631 – 631
Total income 45,176 – 45,176 50,427 – 50,427
Net gains on investments at fair value
through profit or loss 10 – 381,517 381,517 – 80,979 80,979
Net gains on derivative instruments 11 – 41,644 41,644 – 32,226 32,226
Net foreign exchange losses – (3,242) (3,242) – (1,475) (1,475)
Total income and gains 45,176 419,919 465,095 50,427 111,730 162,157
Expenses
Investment management fees 4 (934) (3,734) (4,668) (863) (3,451) (4,314)
Other expenses 5 (2,206) – (2,206) (1,644) – (1,644)
Profit before finance costs and
taxation 42,036 416,185 458,221 47,920 108,279 156,199
Finance costs 6 (23,523) – (23,523) (23,704) – (23,704)
Profit before taxation 18,513 416,185 434,698 24,216 108,279 132,495
Taxation 7 (2,110) (785) (2,895) (2,347) (3,162) (5,509)
Profit after taxation for the year 16,403 415,400 431,803 21,869 105,117 126,986
Basic and diluted earnings per
Participating Preference Share 8 $0.32 $8.23 $8.55 $0.31 $1.52 $1.83
The Company does not have any income or expenses that are not included in the profit after taxation for the year. Accordingly the
profit after taxation for the year is also the total comprehensive income for the year 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 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 year and all items in the above statement derive from continuing operations.
Statement of Comprehensive Income
for the year ended 30 June 2026
48
Fidelity Emerging Markets Limited | Annual Report 2026
The notes on pages 51 to 78 form an integral part of these financial statements
Note
Share
premium
account
$’000
Capital
reserve
$’000
Revenue
reserve
$’000
Total
equity
$’000
Total equity at 30 June 2025 6,291 706,238 59,099 771,628
Profit after taxation for the year – 415,400 16,403 431,803
Participating Preference Shares repurchased and cancelled 14 – (132,253) – (132,253)
Participating Preference Shares repurchased and cancelled
for Strathclyde Pension Fund 14 – (193,927) – (193,927)
Buyback expenses 15 – (910) – (910)
Dividend paid to shareholders 9 – – (12,338) (12,338)
Total equity at 30 June 2026 6,291 794,548 63,164 864,003
Note
Share
premium
account
$’000
Capital
reserve
$’000
Revenue
reserve
$’000
Total
equity
$’000
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 repurchased into Treasury 14 – (94,701) – (94,701)
Dividend paid to shareholders 9 – – (14,103) (14,103)
Total equity at 30 June 2025 6,291 706,238 59,099 771,628
Statement of Changes in Equity
for the year ended 30 June 2026
49
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS GOVERNANCE
Note
30 June
2026
$’000
30 June
2025
$’000
Non-current assets
Investments at fair value through profit or loss 10 767,445 712,861
Current assets
Derivative assets 11 41,149 15,006
Amounts held at futures clearing houses and brokers 42,884 52,521
Other receivables 12 14,333 9,504
Cash and cash equivalents 32,829 9,551
131,195 86,582
Current liabilities
Derivative liabilities 11 22,142 15,784
Other payables 13 12,488 12,031
Bank overdraft 7 –
34,637 27,815
Net current assets 96,558 58,767
Net assets 864,003 771,628
Equity
Share premium account 15 6,291 6,291
Capital reserve 15 794,548 706,238
Revenue reserve 15 63,164 59,099
Total equity 864,003 771,628
Net asset value per Participating Preference Share 16 $21.94 $11.99
The Financial Statements on pages 47 to 78 were approved by the Board of Directors of the Company on 5 October 2026 and signed
on its behalf by:
Heather Manners
Chairman
Statement of Financial Position
as at 30 June 2026
The notes on pages 51 to 78 form an integral part of these financial statements
50
Fidelity Emerging Markets Limited | Annual Report 2026
The notes on pages 51 to 78 form an integral part of these financial statements
30 June
2026
$’000
30 June
2025
$’000
Operating activities
Cash inflow from dividend income from investments 20,364 21,955
Cash inflow from interest income from investments, cash and collateral balances 963 633
Cash inflow from dividend income from derivatives 11,625 14,390
Cash inflow from interest income from derivatives 667 1,166
Cash outflow from taxation paid (6,317) (4,407)
Cash outflow from the purchase of investments (922,863) (746,980)
Cash inflow from the sale of investments 1,242,768 804,105
Cash inflow from net proceeds from settlement of derivatives 38,025 57,520
Cash inflow/(outflow) from amounts held at futures clearing houses and brokers 9,637 (7,569)
Cash outflow from operating expenses (6,608) (6,262)
Net cash inflow from operating activities 388,261 134,551
Financing activities
Cash outflow from CFD interest paid (21,129) (19,611)
Cash outflow from short CFD dividends paid (2,463) (3,011)
Cash outflow from dividends paid to shareholders (12,338) (14,103)
Cash outflow from the repurchase of Participating Preference Shares into Treasury (1,048) (95,594)
Cash outflow from the repurchase and cancellation of Participating Preference Shares (323,860) –
Cash outflow from cancellation buyback expenses (910) –
Net cash outflow from financing activities (361,748) (132,319)
Net increase in cash and cash equivalents 26,513 2,232
Cash and cash equivalents at the start of the year 9,551 8,794
Effect of foreign exchange movements (3,242) (1,475)
Cash and cash equivalents at the end of the year 32,822 9,551
Represented by:
Cash at bank 15,121 9,551
Amount held in Fidelity Institutional Liquidity Fund 17,708 –
Bank overdraft (7) –
32,822 9,551
Statement of Cash Flows
for the year ended 30 June 2026
51
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
1. Principal Activity
Fidelity Emerging Markets Limited (the ‘Company’) was incorporated in Guernsey on 7 June 1989 and commenced activities on
19September 1989. The Company is an Authorised Closed-Ended Investment Scheme as defined by The Authorised Closed-Ended
Investment Schemes Rules and Guidance, 2021 (and, as such, is subject to ongoing supervision by the Guernsey Financial Services
Commission). The Company is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
The Company’s registered office is at Level 3, Mill Court La Charroterie, St Peter Port, Guernsey GY1 1EJ, Channel Islands.
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.
These financial statements were approved by the Board of Directors and authorised for issue on 5 October 2026.
2. Accounting policies
(a) Basis of preparation
The principal accounting policies applied in the preparation of these financial statements on a going concern basis are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated. The Company’s financial statements,
which give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company, have been prepared in
accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS’), which comprise standards
and interpretations approved by the International Accounting Standards Board (‘IASB’), the IFRS Interpretations Committee and
interpretations approved by the International Accounting Standards Committee (‘IASC’) that remain in effect and the Companies
(Guernsey) Law, 2008. 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.
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. The Directors have also considered the continuation vote to be held at the Annual General
Meeting on 1 December 2026 and expect that the resolution will be passed. This assumption is based on the Company’s performance
to 30 June 2026 (in absolute terms and versus the benchmark), the level of discount and informal conversations with shareholders.
Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial
Statements. The Financial Statements do not include any adjustments that would arise if the continuation resolution is not passed and
such adjustments may be material.
Significant accounting estimates, assumptions and judgements
The preparation of financial statements in conformity with IFRS may require management to make critical accounting judgements,
estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from the estimates.
Valuations use observable data to the extent practicable. Changes in any assumptions could affect the reported fair value of the
financial instruments. The determination of what constitutes observable requires significant judgement by the Company. The Company
considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively involved in the relevant market.
Determination of fair value of unlisted investments
The key estimate in the Financial Statements is the determination of the fair value of unlisted investments. This process is overseen
by the Manager’s Fair Value Committee (“FVC”), supported by an external valuer and Fidelity’s unlisted investments specialist, and
is subject to detailed review and appropriate challenge by the Directors. The valuation of unlisted investments significantly impacts
the financial statements at the Statement of Financial Position date. The valuation approach for the fund’s unlisted investments is
asfollows:
• Investee Funds: These investments are primarily valued based on the official valuation statements from the Investee Funds.
• Russian securities: Due to the current market conditions and restrictions, these securities are valued at nil, reflecting their impaired
status and lack of marketability.
Notes to the Financial Statements
52
Fidelity Emerging Markets Limited | Annual Report 2026
2. Accounting Policies continued
Adoption of new and revised International Accounting Standards – the accounting policies adopted are consistent with those of
the previous financial year.
At the date of authorisation of these Financial Statements, the following new and amended IFRS Accounting Standards, as adopted by
the European Union, were in issue but not yet effective:
(i) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 (effective for
annual periods beginning on or after 1 January 2026).
The International Accounting Standards Board (IASB) issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent
questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities.
Among other amendments, the IASB clarified the date of recognition and derecognition of some financial assets and liabilities,
with a new exception for some financial liabilities settled through an electronic cash transfer system.
(ii) IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1January 2027).
The IASB issued the new standard on presentation and disclosure in financial statements, which replaces IAS 1, with a focus on
updates to the statement of comprehensive income.
The key new concepts introduced in IFRS 18 relate to:
• the structure of the statement of comprehensive income with defined subtotals;
• the requirement to determine the most useful structured summary for presenting expenses in the statement of comprehensive
income;
• required disclosures in a single note within the financial statements for certain profit or loss performance measures that are
reported outside an entity’s financial statements (that is, management-defined performance measures); and
• enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.
The Company is currently still assessing the effect of the forthcoming standard and amendments.
No other new standards or amendments to standards are expected to have a material effect on the financial statements of
theCompany.
(b) Financial Instruments
Classification
(i) Assets
The Company classifies its investments based on both the Company’s business model for managing those financial assets and
the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is
evaluated on a fair value basis. The Company is primarily focused on fair value information and uses that information to assess the
assets’ performance and to make decisions. The Company has not taken the option to irrevocably designate any equity securities
as fair value through other comprehensive income. All investments are measured at fair value through profit or loss. The Company’s
investments are included in the Financial assets at fair value through profit and loss line in the Statement of Financial Position.
(ii) Liabilities
Derivative contracts that have a negative fair value are presented as derivative financial liabilities at fair value through profit or loss.
As such, the Company classifies all of its investment portfolio as financial assets or liabilities at fair value through profit or loss. The
Company’s policy requires the Manager and the Board of Directors to evaluate the information about these financial assets and
liabilities on a fair value basis together with other related financial information.
Notes to the Financial Statements continued
53
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
2. Accounting Policies continued
Recognition/derecognition
The Company recognises a financial asset or a financial liability when, and only when, it becomes a party to the contractual
provisions of the instrument.
Purchases and sales of investments are recognised on their trade date, the date on which the Company commits to purchase or sell
the investment. Investments are derecognised when the rights to cash flows from the investments have expired or the Company has
transferred substantially all risks and rewards of ownership. The Company derecognises a financial liability when the obligation under
the liability is discharged, cancelled or expires.
Measurement
Financial assets at fair value through profit and loss are measured initially at fair value being the transaction price. Transaction costs
incurred to acquire financial assets at fair value through profit or loss are expensed in the Statement of Comprehensive Income.
Transaction costs include fees and commissions paid to agents, advisers, brokers and dealers. Subsequent to initial recognition, all
financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value
of the ‘financial assets at fair value through profit or loss’ category are presented in the Statement of Comprehensive Income in the
year in which they arise.
The Company includes transaction costs, incidental to the purchase or sale of investments within Net gains/(losses) on financial
assets at fair value through profit or loss in the capital column of the Statement of Comprehensive Income and has disclosed them in
Note10below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Securities listed on active markets are valued based on their last bid price for valuation and financial statement purposes.
Equity Linked Notes are valued based on the available price of the underlying asset as at reporting date.
In the normal course of business, the Company may utilise Participatory notes (‘P Notes’) to gain access to markets that otherwise
would not be allowable as a foreign investor. P Notes are issued by banks or broker-dealers and allow the Company to gain exposure
to local shares in foreign markets. They are valued based on the last price of the underlying equity at the valuation date.
The Company’s investment in other funds (‘Investee Funds’) are subject to the terms and conditions of the respective Investee Fund’s
offering documentation. The investments in Investee Funds are primarily valued based on the latest available redemption price
for such units in each Investee Fund, as determined by the Investee Funds’ administrators. The Company reviews the details of the
reported information obtained for the Investee Funds and considers the liquidity of the Investee Fund or its underlying investments,
the value date of the net asset value provided, any restrictions on redemptions and the basis of the Investee Funds’ accounting.
Ifnecessary, the Company makes adjustments to the net asset value of the Investee Funds to obtain the best estimate of fair value.
The Company may make adjustments to the value of a security if it has been materially affected by events occurring before the
Company’s NAV calculation but after the close of the primary markets on which the security is traded. The Company may also make
adjustment to the value of its investments if reliable market quotations are unavailable due to infrequent trading or if trading in a
particular security was halted during the day and did not resume prior to the Company’s NAV calculation.
In preparing these financial statements the Directors have considered the impact of climate change risk as a principal and as an
emerging risk as set out on page 22, and have concluded that there was no further impact of climate change to be taken into account
as the investments are valued based on market pricing. In line with IFRS 13 – ”Fair Value Measurement” investments are valued at
fair value, which for the Company are quoted bid prices for investments in active markets at the statement of financial position date.
Investments which are unlisted are priced using market-based valuation approaches. All investments therefore reflect the market
participants view of climate change risk on the investments held by the Company.
54
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
2. Accounting Policies continued
Derivative Instruments
When appropriate, permitted transactions in derivative instruments are used. Derivative transactions into which the Company may
enter include long and short contracts for difference (“CFDs”), futures and options.
Under IFRS 9 derivatives are classified at fair value through profit or loss – held for trading, and are initially accounted and measured
at fair value on the date the derivative contract is entered into and subsequently measured at fair value as follows:
• Long and short CFDs – the difference between the strike price and the value of the underlying shares in the contract based on
exchange traded prices in an active market;
• Futures contracts – the difference between the contract price and the quoted traded price in an active market;
• Exchange traded options – valued based on similar instruments or the quoted traded price in an active market for the contract;
and
• Forward currency contracts – valued at the appropriate quoted forward foreign exchange rate ruling at the Statement of Financial
Position date;
• Over the counter options – valued based on indicative quotes received from independent third party vendors.
Where transactions are used to protect or enhance income, if the circumstances support this, the income and expenses derived are
included in derivative income in the revenue column of the Statement of Comprehensive Income. Where such transactions are used
to protect or enhance capital, if the circumstances support this, the income and expenses derived are included in gains/(losses) on
derivative instruments in the capital column of the Statement of Comprehensive Income. Any positions on such transactions open at the
reporting date are reflected on the Statement of Financial Position at their fair value within current assets or current liabilities.
Amortised cost measurement
Cash at bank, amounts held at futures clearing houses and brokers and other receivables are carried at amortised cost using the
effective interest method less any allowance for impairment. Gains and losses are recognised in profit or loss when the receivables
are derecognised or impaired, as well as through the amortisation process.
Capital gains tax payable and other payables are measured at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the liabilities are derecognised, as well as through the amortisation of these liabilities.
(c) Foreign Currency Translation
Functional and Presentation Currency
The Company maintains its books and records in the currency of its primary economic environment, known as its functional currency.
The Directors have carefully assessed this environment by considering several factors, including the currency in which the original
capital was raised, the currency used for past distributions, and the currency in which capital would be returned in the event of a
breakup. The Directors have considered the exposure of underlying investments to different currencies. These considerations ensure
the Financial Statements accurately reflect the Company’s economic circumstances and investment exposure.
The Directors believe that US dollars best represent the functional currency of the Company. The Financial Statements, results and the
Statement of Financial Position of the Company are also expressed in US dollars which is the presentation currency of the Company
and have been rounded to the nearest thousand unless otherwise stated.
Transactions and Balances
Transactions in currencies other than US dollars are recorded at the rates of exchange prevailing on the date of the transaction.
Attheend of each reporting period, monetary items and non-monetary assets and liabilities that are fair valued and are
denominated in foreign currencies are retranslated at rates prevailing at the end of the reporting period. Gains and losses arising
on translation are included in the Statement of Comprehensive Income for the year. Foreign exchange gains and losses relating to
cash and cash equivalents are presented in the Statement of Comprehensive Income within ‘Net foreign exchange gains or losses’.
Foreign exchange gains and losses relating to financial assets at fair value through profit or loss and derivatives are presented in the
Statement of Comprehensive Income within ‘Net gains or losses on investments’ and ‘Net gains on derivative instruments’ respectively.
(d) Recognition of Dividend and Interest Income
Dividends arising on the Company’s investments are accounted for on an ex-dividend basis, gross of applicable withholding taxes.
Interest on cash at bank and collateral is accrued on a day-to-day basis using the effective interest method. Dividends and interest
income are recognised in the Statement of Comprehensive Income.
55
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
2. Accounting Policies continued
(e) Income from Derivatives
Derivative instrument income received from dividends on long (or payable from short) CFDs are accounted for on the date on
which the right to receive the payment is established, normally the ex-dividend date. The amount net of withholding tax is credited
(orcharged) to the revenue column of the Statement of Comprehensive Income.
Interest received on CFDs is accounted for on an accruals basis and credited to the revenue column of the Statement of Comprehensive
Income. Interest received on CFDs represent the finance costs calculated by reference to the notional value of the CFDs.
(f) Finance Costs
Finance costs comprise bank charges and finance costs paid on CFDs, which are accounted for on an accruals basis, and dividends
paid on short CFDs, which are accounted for on the date on which the obligation to incur the cost is established, normally the
exdividend date. Finance costs are charged in full to the revenue column of the Statement of Comprehensive Income.
(g) Dividend Distribution
Dividend distributions are at the discretion of the Board of Directors. A dividend is recognised as a liability in the period in which it is
approved at the Annual General Meeting of the shareholders and is recognised in the Statement of Changes in Equity.
(h) Cash and Cash Equivalents
Cash comprises current deposits with banks. Cash equivalents are short-term highly liquid investments that are readily convertible to
known amounts of cash, are subject to an insignificant risk of changes in value, and are held for the purpose of meeting short-term
cash commitments rather than for investment or other purposes.
Bank overdrafts are accounted for as short term liabilities on the Statement of Financial Position and the interest expense is recorded
using the effective interest rate method. Bank overdrafts are classified as other financial liabilities.
(i) Amounts held at/due to futures clearing houses and brokers
Cash deposits are held in segregated accounts on behalf of brokers as collateral against open derivative contracts. These are carried
at amortised cost.
(j) Due To and Due From Brokers
Amounts due from/to brokers are recognised initially at fair value and subsequently measured at amortised cost. At each reporting
date, the Company shall measure the loss allowance on amounts due from broker at an amount equal to the lifetime expected credit
losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased
significantly since initial recognition, the Company shall measure the loss allowance at an amount equal to 12-month expected credit
losses. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and
default in payments are all considered indicators that amounts may be credit impaired. If the credit risk increases to the point that
it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss
allowance. A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days
past due. Any contractual payment which is more than 90 days past due is considered credit impaired.
(k) Other receivables
Other receivables include amounts receivable on settlement of derivatives, securities sold pending settlement, accrued income,
taxation recoverable and other debtors and prepayments incurred in the ordinary course of business. If collection is expected in one
year or less they are classified as current assets. If not, they are presented as non-current assets. Other receivables are recognised
initially at fair value and, where applicable, subsequently measured at amortised cost using the effective interest rate method and as
reduced by appropriate allowance for estimated irrecoverable amounts.
(l) Other payables
Other payables include amounts payable on settlement of derivatives, securities purchased pending settlement, investment
management fees, amounts payable for repurchase of shares, finance costs payable and expenses accrued in the ordinary course
of business. Other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Other payables are recognised initially at fair value and, where applicable, subsequently measured at
amortised cost using the effective interest rate method.
(m) Segment Reporting
Operating Segments are reported in a manner consistent with the internal reporting used by the chief operating decision make
(‘CODM’). The CODM, who is responsible for allocation of resources and assisting performance of the operating segments, has been
identified as the Directors of the Company, as the Directors are ultimately responsible for investment decisions.
The Company is engaged in a single segment business and, therefore, no segmental reporting is provided.
56
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
2. Accounting Policies continued
(n) Management fees and other expenses
All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income.
Expenses are allocated wholly to revenue with the following exceptions:
• Management fees are allocated 20% to revenue and 80% to the capital, in line with the Board’s expected long-term split of
revenue and capital return from the Company’s investment portfolio; and
• Expenses which are incidental to capital events are charged to capital.
(o) Taxation
The Company currently incurs withholding taxes imposed by certain countries on investment income and capital gains taxes upon realisation
of its investments. Such income or gains are recorded gross of withholding taxes and capital gains taxes in the Statement of Comprehensive
Income. Withholding taxes and capital gains taxes are shown as separate items in the Statement of Comprehensive Income.
In accordance with IAS 12, ‘Income taxes’, the Company is required to recognise a tax liability when it is probable that the tax laws
of foreign countries require a tax liability to be assessed on the Company’s capital gains sourced from such foreign country, assuming
the relevant taxing authorities have full knowledge of all the facts and circumstances. The tax liability is then measured at the amount
expected to be paid to the relevant taxation authorities, using the tax laws and rates that have been enacted or substantively enacted
by the end of the reporting period. There is sometimes uncertainty about the way enacted tax law is applied to offshore investment
funds. This creates uncertainty about whether or not a tax liability will ultimately be paid by the Company. Therefore, when measuring
any uncertain tax liabilities, management considers all of the relevant facts and circumstances available at the time that could
influence the likelihood of payment, including any formal or informal practices of the relevant tax authorities.
(p) Share Capital
Participating Preference Shares are not redeemable and there is no obligation to pay cash or another financial asset to the holder
but are entitled to receive dividends. They are classified as equity. Incremental costs directly attributable to the issue of new shares
are shown in equity as a deduction from the proceeds net of tax.
(q) Purchase of Own Shares
The cost of purchases of the Company’s own shares is shown as a reduction in Shareholders’ Funds. The Company’s net asset value
and return per Participating Preference Share are calculated using the number of shares outstanding after adjusting for purchases.
(r) Critical Accounting Estimates and Assumptions
As stated in Note 2(a) Basis of Preparation, the preparation of financial statements, in conformity with IFRS, requires the use of certain
critical accounting estimates. It also requires the Board of Directors to exercise its judgment in the process of applying the Company’s
accounting policies. For example, the Company may, from time to time, hold financial instruments that are not quoted in active
markets, such as minority holdings in investment and private equity companies. Fair values of such instruments are determined using
different valuation techniques validated and periodically reviewed by the Board of Directors.
(s) Capital reserve
The following are transferred to the capital reserve:
• Gains and losses on the disposal of financial assets at fair value through profit and loss and derivatives instruments;
• Changes in the fair value of financial assets at fair value through profit and loss and derivative instruments, held at the year end;
• Foreign exchange gains and losses of a capital nature;
• 80% of management fees;
• Dividends receivable which are capital in nature;
• Taxation charged or credited relating to items which are capital in nature; and
• Other expenses which are capital in nature.
The Company holds 9,025,940 participating preference shares in Treasury which have been excluded from the net asset value and
earnings per participating preference share calculations from the date of repurchase into Treasury.
57
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
3. Income
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Investment income
UK dividends 1,366 619
Overseas dividends 17,500 22,320
Interest on securities – 2
18,866 22,941
Derivative income
Dividend income on long CFDs 10,676 14,964
Interest income on CFDs 699 1,166
Option income 13,972 10,725
25,347 26,855
Other income
Interest income on cash, collateral and money market funds 947 631
Interest on capital gains tax refund 16 –
963 631
Total income 45,176 50,427
Special dividends of $93,000 (2025: $3,230,000) have been recognised in capital.
4. Investment Management Fees
Year ended 30 June 2026 Year ended 30 June 2025
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Investment management fees 934 3,734 4,668 863 3,451 4,314
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager (the “Manager”) and has delegated
investment management to FIL Investments International (FII). Both companies are Fidelity group companies.
FII charges an investment 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. Investment management fees have been allocated 80% to the capital reserve in accordance
with the Company’s accounting policies.
Management fees incurred by collective investment schemes or investment companies invested into by the Company managed or
advised by the Investment Manager are reimbursed.
58
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
5. Other Expenses
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Allocated to revenue:
Custodian fees 316 251
Directors’ fees 307 264
Directors’ expenses 131 30
Administration fees 223 216
Audit fees 116 116
Legal and professional fees 396 83
Marketing expenses 468 334
Other expenses 249 350
2,206 1,644
Administration fees
The Administrator is entitled to receive a fee, payable monthly, based on the Net Asset Value of the Company and time incurred.
Custodian fee
Under the Custodian Agreement, the Custodian to the Company is entitled to receive a fee payable monthly, based on the Net Asset
Value of the Company. All custody services are performed by JP Morgan Chase Bank.
The Company also incurs charges and expenses of other organisations with whom securities are held. The total of all Custodian fees
for the year represented approximately 0.04% (2025: 0.04%) per annum of the average Net Assets of the Company.
6. Finance Costs
Year ended 30 June 2026 Year ended 30 June 2025
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Dividends on short CFDs 2,352 – 2,352 3,506 – 3,506
Interest on CFDs 21,171 – 21,171 20,198 – 20,198
23,523 – 23,523 23,704 – 23,704
7. Taxation
Year ended 30 June 2026 Year ended 30 June 2025
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Capital gains tax – 785 785 – 3,162 3,162
Overseas taxation 2,110 – 2,110 2,347 – 2,347
2,110 785 2,895 2,347 3,162 5,509
The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance,
2012. As such, the Company is liable to pay a fixed annual fee, currently £1,600 (2025: £1,600).
Income due to the Company is subject to withholding taxes. The Manager undertakes regular reviews of the tax situation of the
Company and believes that withholding taxes on dividend income and capital gains taxes on capital gains are currently the material
transactions that generate the amounts of tax payable.
In accordance with IAS 12, ‘Income taxes’, where necessary the Company provides for deferred taxes on any capital gains/losses on
the revaluation of securities in such jurisdictions where capital gains tax is levied.
The capital gains charge has been calculated on the basis of the tax laws enacted or substantially enacted at the reporting date
in the countries where the Company’s investments generate taxable income on realisation. The Manager, on behalf of the Board,
periodically evaluates which applicable tax regulations are subject to interpretation and establishes provisions when appropriate.
As at 30 June 2026, $1,282,000 capital gains tax refund was recognised in the Statement of Financial Position (2025: $2,140,000
capital gains tax provision).
59
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
8. Basic and diluted earnings per Participating Preference Share
Year ended
30 June
2026
Year ended
30 June
2025
Revenue earnings per Participating Preference Share $0.32 $0.31
Capital earnings per Participating Preference Share $8.23 $1.52
Total earnings per Participating Preference Share (basic and diluted) $8.55 $1.83
The basic and diluted earnings per Participating Preference Share is based on the profit after taxation for the year divided by the
weighted average number of Participating Preference Shares held outside of Treasury during the year, as shown below:
$’000 $’000
Revenue profit after taxation for the year 16,403 21,869
Capital profit after taxation for the year 415,400 105,117
Total profit after taxation for the year 431,803 126,986
Number Number
Weighted average number of Participating Preference Shares held outside of Treasury 50,507,081 69,485,764
9. Dividends Paid to Shareholders
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Dividend paid
2025 final dividend of 26.0¢ (2024: 20.0¢) per Participating Preference Share 12,338 14,103
Total dividend paid 12,338 14,103
Dividend proposed
2026 final dividend of 33.0¢ (2025: 26.0¢) per Participating Preference Share 12,993 16,729
Total dividend proposed 12,993 16,729
The Directors have proposed the payment of a final dividend for the year ended 30 June 2026 of 33.0¢ per Participating Preference
Share, which is subject to approval by shareholders at the Annual General Meeting on 1 December 2026 and has not been included
as a liability in these financial statements. The dividend will be paid on 8 December 2026 to shareholders on the register at the close
of business on 13 November 2026 (ex-dividend date 12 November 2026).
60
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
10. Investments at Fair Value through Profit or Loss
30 June
2026
$’000
30 June
2025
$’000
Investments
Equity securities 759,695 708,476
Investee funds 7,750 4,385
Total investments 767,445 712,861
Opening book cost 654,401 695,828
Opening unrealised gains 58,460 925
Opening fair value of investments 712,861 696,753
Movements in the year
Purchases at cost 921,043 740,453
Sales – proceeds (1,247,976) (805,324)
Gains on investments 381,517 80,979
Closing fair value 767,445 712,861
Closing book cost 586,286 654,401
Closing unrealised gains 181,159 58,460
Closing fair value of investments 767,445 712,861
Gains/(losses) on Investments at fair value through profit or loss
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Realised gains/(losses) on investments
Realised gains 333,101 103,003
Realised losses (74,283) (79,559)
Net realised gains on investments 258,818 23,444
Change in unrealised gains/(losses) on investments
1
Change in unrealised gains on investments 324,822 31,166
Change in unrealised losses on investments (202,123) 26,369
Net change in unrealised gains on investments 122,699 57,535
Net gains on investments 381,517 80,979
1. The change in unrealised gains/(losses) on investments is calculated as the difference between the total unrealised investments gains/(losses) recognised in the
Statement of Financial Position at reporting date and the total unrealised investments gains/(losses) position recognised at the comparative date.
The Company received $1,247,976,000 (2025: $805,324,000) from investments at fair value sold in the year. The book cost of these
investments at fair value when they were purchased was $989,158,000 (2025: $781,880,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of the investments at fair value through
profit or loss.
Investment transaction costs incurred in the acquisition and disposal of investments, which are included in the gains on investments at
fair value through profit and loss were as follows:
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Purchases transaction costs 955 930
Sales transaction costs 1,993 1,081
2,948 2,011
61
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
11. Derivative Instruments
Year ended
30 June
2026
$’000
Year ended
30 June
2025
$’000
Realised gains/(losses) on derivative instruments
Gains on CFDs 484,341 194,933
Gains on futures contracts 14,121 30,630
Gains on options 15,135 17,153
Gains on forward currency contracts 2,315 1,881
Losses on CFDs (376,594) (146,864)
Losses on futures contracts (95,233) (31,875)
Losses on options (20,564) (20,472)
Losses on forward currency contracts (403) (2,539)
Net realised gains on derivative instruments 23,118 42,847
Change in unrealised gains/(losses) on derivative instruments
1
Change in unrealised gains on CFDs 20,224 (7,695)
Change in unrealised gains on futures contracts 4,691 74
Change in unrealised gains on options 972 (1,835)
Change in unrealised gains on forward currency contracts 118 (293)
Change in unrealised losses on CFDs (9,934) (2,452)
Change in unrealised losses on futures contracts 4,137 (2,248)
Change in unrealised losses on options (1,682) 3,828
Net change in unrealised gains/(losses) on derivative instruments 18,526 (10,621)
Net gains on derivative instruments 41,644 32,226
30 June
2026
Fair value
$’000
30 June
2025
Fair value
$’000
Fair value of derivative instruments recognised on the Statement of Financial Position
2
Derivative instrument assets 41,149 15,006
Derivative instrument liabilities (22,142) (15,784)
19,007 (778)
1. The change in unrealised gains/(losses) on each type of derivative contract is calculated as the difference between the total unrealised gains/(losses) on the relevant
derivative positions recognised in the Statement of Financial Position at reporting date and the total unrealised gains/(losses) on the relevant derivative positions
recognised at the comparative date.
2. The fair value hierarchy of the derivative instruments is shown in Note 17.
62
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
11. Derivative Instruments continued
30 June 2026 30 June 2025
Fair value
$’000
Asset
exposure
$’000
Fair value
$’000
Asset
exposure
$’000
At the year end the Company held the following derivative instruments
Long CFDs 5,554 572,585 2,037 433,157
Short CFDs 6,170 199,865 (603) 180,705
Long future contracts 67 6,954 (45) 16,965
Short future contracts 785 23,282 (942) 28,958
Short futures contracts (hedging exposure) 4,182 (205,692) (2,808) (160,910)
Long call option contracts 5,054 19,404 3,865 21,474
Short put option contracts – – 79 680
Short call option contracts (hedging exposure) (1,367) (10,413) (827) (10,949)
Long put option contracts (1,626) 12,662 (1,605) 12,313
Forward currency contracts 188 – 71 –
19,007 618,647 (778) 522,393
12. Other Receivables
30 June
2026
$’000
30 June
2025
$’000
CFD interest receivable 32 –
CFD dividends receivable 1,286 2,235
Securities sold for future settlement 8,597 3,389
Amounts receivable on settlement of derivatives 1,085 1,632
Accrued income 668 2,166
Taxation recoverable 2,626 –
Other receivables 39 82
14,333 9,504
13. Other Payables
30 June
2026
$’000
30 June
2025
$’000
CFD interest payable 1,060 1,018
CFD dividends payable 1,000 1,111
Securities purchased for future settlement 4,266 6,086
Amounts payable on settlement of derivatives 1,655 9
Investment management fees 444 365
Custodian fees 47 45
Directors’ fees 76 66
Amounts payable for repurchase of shares held in Treasury – 1,048
Amounts payable for repurchase of shares for cancellation 2,320 –
Capital gains tax payable 1,344 2,140
Accrued expenses 276 143
12,488 12,031
63
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
14. Share Capital
2026
Number of
shares
2025
Number of
shares
Authorised and Issued
Founder shares of no par value 1,000 1,000
Issued
Participating Preference Shares held outside of Treasury
Beginning of the year 64,342,245 74,646,287
Participating Preference Shares repurchased and cancelled (8,527,914) –
Participating Preference Shares repurchased and cancelled for Strathclyde Pension Fund (16,441,177) –
Participating Preference Shares repurchased into Treasury – (10,304,042)
End of the year 39,373,154 64,342,245
Participating Preference Shares held in Treasury
1
Beginning of the year 13,225,940 2,921,898
Participating Preference Shares repurchased into Treasury – 10,304,042
Participating Preference Shares cancelled from Treasury (4,200,000) –
End of the year 9,025,940 13,225,940
Total Participating Preference Shares 48,399,094 77,568,185
1 The ordinary shares held in Treasury carry no rights to vote, to receive a dividend or to participate in a winding up of the Company.
The total costs associated with the repurchase of the shares of $327,090,000 were charged to the capital reserve for the year ended
30June 2026. (30 June 2025: $94,701,000).
In November 2025, the Company completed the repurchase of 16,441,177 Participating Preference Shares from the Strathclyde
Pension Fund, representing approximately 25.7% of the Company’s voting share capital. The shares were repurchased at an agreed
discount of 14% to NAV and subsequently cancelled. As the Company’s share price discount to NAV at the time of completion was less
than 10%, the transaction resulted in an immediate uplift of more than 4.5% in NAV per share for continuing shareholders.
The Company may issue an unlimited number of Unclassified Shares of no par value.
Founder Shares
The Founder Shares are non-redeemable and carry no rights other than the right to vote at general meetings of the Company. On a
poll, each holder is entitled to one vote. The Founder Shares are no par value shares.
Treasury Shares
As at 30 June 2026, the Company held 9,025,940 shares in Treasury (2025: 13,225,940).
64
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
14. Share Capital continued
Participating Preference Shares
The holders of Participating Preference Shares rank ahead of holders of any other class of share in issue in the event of winding up
and are entitled to participate in any surplus assets available for distribution. The Participating Preference Shares confer the right to
receive discretionary dividends declared by the Company and, at general meetings, on a poll, confer one vote in respect of each
Participating Preference Share held.
The Participating Preference Shares are classified as equity as they represent a residual interest in the net assets of the Company and
do not give rise to a contractual obligation on the Company to deliver cash or another financial asset. All classes of share capital
are classified as equity in accordance with IAS 32 ‘Financial Instruments: Presentation’, as the shares are non-redeemable and do not
impose any contractual obligation on the Company to deliver cash or another financial asset to the holders.
15. Capital and Reserves
Share
premium
account
$’000
Capital
reserve
$’000
Revenue
reserve
$’000
Total
equity
$’000
At 1 July 2025 6,291 706,238 59,099 771,628
Net gains on investments at fair value through profit or
loss (see Note 10) – 381,517 – 381,517
Net gains on derivative instruments (see Note 11) – 41,644 – 41,644
Net foreign exchange losses – (3,242) – (3,242)
Management fees (see Note 4) – (3,734) – (3,734)
Capital gains tax (see Note 7) – (785) – (785)
Participating Preference Shares repurchased and
cancelled (see Note 14) – (132,253) – (132,253)
Participating Preference Shares repurchased and
cancelled for Strathclyde Pension
Fund (see Note 14)* – (193,927) – (193,927)
Buyback expenses – (910) – (910)
Revenue profit after taxation for the year – – 16,403 16,403
Dividends paid to shareholders (see Note 9) – – (12,338) (12,338)
At 30 June 2026 6,291 794,548 63,164 864,003
* In November 2025, the Company completed the repurchase of a large shareholding (16.4 million shares) from the Strathclyde Pension Fund, equivalent to roughly 25%
of the shares in issue. These shares were bought back at an agreed 14% discount to NAV and subsequently cancelled. Given the share price discount to NAV at the
time of the repurchase was less than 10%, the transaction led to an immediate uplift of more than 4.5% in the NAV per share for continuing shareholders, underlining the
Company’s commitment to a fair outcome for all its investors.
65
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
15. Capital and Reserves continued
Share
premium
account
$’000
Capital
reserve
$’000
Revenue
reserve
$’000
Total
equity
$’000
At 1 July 2024 6,291 695,822 51,333 753,446
Net gains on investments at fair value through profit or
loss (see Note 10) – 80,979 – 80,979
Net gains on derivative instruments (see Note 11) – 32,226 – 32,226
Net foreign exchange losses – (1,475) – (1,475)
Management fees (see Note 4) – (3,451) – (3,451)
Capital gains tax (see Note 7) – (3,162) – (3,162)
Participating Preference Shares repurchased into
Treasury (see Note 14) – (94,701) – (94,701)
Revenue profit after taxation for the year – – 21,869 21,869
Dividend paid to shareholders (see Note 9) – – (14,103) (14,103)
At 30 June 2025 6,291 706,238 59,099 771,628
Share Premium
Share Premium is the amount by which the value of shares subscribed for exceeded their nominal value at the date of issue.
The capital reserve balance at 30 June 2026 includes unrealised investment holding gains of $181,159,000 (2025: gains of
$58,460,000) as detailed in Note 10.
16. Net Asset Value per Participating Preference Share
The calculation of the net asset value per Participating Preference Share is based on the net assets divided by the number of
Participating Preference Shares held outside of Treasury:
30 June
2026
30 June
2025
Net assets $864,003,000 $771,628,000
Participating Preference Shares held outside of Treasury 39,373,154 64,342,245
Net asset value per Participating Preference Share $21.94 $11.99
17. Financial Instruments
Management of risk
The Company’s investing activities in pursuit of its investment objective involve certain inherent risks. The Board confirms that there is
an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Board, with the assistance of the
Investment Manager, has developed a risk matrix which, as part of the internal control process, identifies the risks that the Company
faces. Risks are identified and graded in this process, together with steps taken in mitigation, and are updated and reviewed on an
ongoing basis. Risks identified are shown in the Strategic Report on pages 22 to 25.
This note, prepared in accordance with IFRS 7: Financial Instruments – Disclosures, describes the Company’s exposure to financial
instrument risks at the reporting date and the Company’s related risk management objectives, policies and processes.
66
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
The Company’s financial instruments may comprise:
• Equity shares (listed and unlisted), preference shares, equity linked notes, convertible bonds, rights issues, holdings in investment
companies and private placements;
• Derivative instruments including CFDs, warrants, futures and options written or purchased on stocks and equity indices and forward
currency contracts; and
• Cash, liquid resources and short-term receivables and payables that arise from its operation; and
• Bank borrowings.
The risks identified by IFRS 7 arising from the Company’s financial instruments are market price risk (which comprises interest rate risk,
foreign currency risk and other price risk), liquidity risk, credit and counterparty risk and derivative instrument risk. The Board reviews
and agrees policies for managing each of these risks, which are summarised below. These policies are consistent with those followed
last year.
Interest rate risk
The Company finances its operations through its capital and reserves. In addition, the Company has gearing through the use of
derivative instruments. The level of gearing is reviewed by the Board and the Investment Manager. The Company is exposed to a
financial risk arising as a result of any increases in interest rates associated with the funding of the derivative instruments.
Interest rate risk exposure
The amounts of the Company’s financial instruments that are exposed to movements in interest rates are shown below:
30 June
2026
$’000
30 June
2025
$’000
Exposure to financial instruments that bear interest
Long CFDs – exposure less fair value 567,031 431,120
Bank overdraft 7 –
567,038 431,120
Exposure to financial instruments that earn interest
Short CFDs – exposure plus fair value 206,035 180,102
Amounts held at futures clearing houses and brokers 42,884 52,521
Cash and cash equivalents 32,829 9,551
281,748 242,174
Net exposure to financial instruments that bear interest (285,290) (188,946)
Interest rate risk sensitivity analysis
Based on the financial instruments held and interest rates at the statement of financial position date, an increase of 1% in interest
rates throughout the year, with all other variables held constant, would have decreased the net profit after taxation for the year and
decreased the net assets of the Company by $2,853,000 (2025: decreased the net profit after taxation for the year and decreased
the net assets of the Company by $1,889,000). A decrease of 1% in interest rates throughout the year would have had an equal but
oppositeeffect.
Foreign currency risk
The Company invests in financial instruments and enters into transactions denominated in currencies other than its functional currency.
Consequently, the Company is exposed to risks that the exchange rate of its functional currency relative to other foreign currencies
may change in a manner that has an adverse effect on the value of that portion of the Company’s assets or liabilities denominated
in currencies other than US dollars (functional currency) or UK Sterling (the currency in which shares are traded on the London
StockExchange).
67
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STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
17. Financial Instruments continued
Three principal areas have been identified where foreign currency risk could impact the Company:
• Movements in currency exchange rates affecting the value of investments and derivatives exposures;
• Movements in currency exchange rates affecting short-term timing differences, for example, between the date when an investment
is bought or sold and the date when settlement of the transaction occurs; and
• Movements in currency exchange rates affecting income received.
Currency exposure of financial assets and liabilities
The Company’s financial assets comprise of investments, positions on derivative instruments, short-term debtors, cash and cash equivalents.
The Company finances its investment activities through its ordinary share capital and reserves. The Company’s financial liabilities
comprise positions on derivative instruments and other payables.
The net currency exposure profile of these financial assets/(liabilities) is shown below:
Currency
Investments
held at
fair value
through
profit or loss
$’000
Asset/
(liabilities)
exposure of
derivative
instruments
1
$’000
Cash, cash
equivalents
and other
receivables/
(payables)
2
$’000
2026
Total foreign
currency risk
$’000
Brazilian real 54,710 – 220 54,930
Canadian dollar 18,086 32,684 27 50,797
Chinese yuan renminbi 67,366 – – 67,366
Euro 14,167 4,698 443 19,308
Sterling 4,590 22,689 3,403 30,682
Hong Kong dollar 1,146 43,142 1,275 45,563
Hungarian forint 22,221 – 1,382 23,603
Indian rupee 55,059 (23,251) 23,507 55,315
Indonesian rupiah 22,466 – (210) 22,256
Japanese yen – (17,465) – (17,465)
Korean won 187,525 (31) 2,798 190,292
Mexican peso 16,841 8,895 (10) 25,726
Nigerian naira 11,972 – 360 12,332
Sol 10,648 – – 10,648
Philippine peso 1,950 – – 1,950
Polish złoty 14,974 (10,097) 3,020 7,897
Romanian leu 1,681 – (520) 1,161
Turkish lira 23,070 – – 23,070
Taiwan dollar 179,134 – 402 179,536
United States dollar 19,531 79,564 40,983 140,078
Vietnamese dong 11,215 – – 11,215
South African rand 29,093 34,222 (151) 63,164
Other currencies – (2,509) 622 (1,887)
767,445 172,541 77,551 1,017,537
1. The asset exposure of long and short derivative positions is after the netting of hedging exposures and forward currency contracts.
2. Includes amounts held at futures clearing houses and brokers.
68
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
Currency
Investments
held at
fair value
through
profit or loss
$’000
Asset/
(liabilities)
exposure of
derivative
instruments
1
$’000
Cash, cash
equivalents
and other
receivables/
(payables)
2
$’000
2025
Total foreign
currency risk
$’000
Brazilian real 40,116 – 213 40,329
Canadian dollar 29,984 24,222 (22) 54,184
Chinese yuan renminbi 15,173 – – 15,173
Euro 26,672 (7,301) 80 19,451
Hong Kong dollar 15,298 104,635 752 120,685
Hungarian forint 19,303 – – 19,303
Indian rupee 108,157 (15,666) 27,173 119,664
Indonesian rupiah 33,375 – – 33,375
Japanese yen – (13,964) (197) (14,161)
Korean won 20,415 (10,485) 5,011 14,941
Mexican peso 41,652 10,191 55 51,898
Nigerian naira 12,067 – 324 12,391
Poland złoty 16,704 (14,578) 13 2,139
Romanian Leu 11,310 – (31) 11,279
Saudi riyal 4,402 – 385 4,787
Sol 8,557 – 1,024 9,581
South African rand 83,832 75,841 (52) 159,621
Sterling – 34,563 861 35,424
Swedish krona – (10,825) 108 (10,717)
Taiwan dollar 127,956 – 478 128,434
Turkish lira 9,226 – – 9,226
United Arab Emirates dirham 19,003 – – 19,003
United States dollar 52,796 (73,794) 22,061 1,063
Vietnamese dong 16,863 – 1,304 18,167
Other currencies – (2,099) 5 (2,094)
712,861 100,740 59,545 873,146
1. The asset exposure of long and short derivative positions is after the netting of hedging exposures and forward currency contracts.
2. Includes amounts held at futures clearing houses and brokers.
Foreign currency risk management
The sensitivity analysis below illustrates the estimated impact on net assets of a 5% movement in the US dollar against the basket of
currencies to which the Company is exposed, with all other variables held constant. A weakening of the US dollar would increase net
assets, while a strengthening of the US dollar would decrease net assets. The estimated impacts are presented in the table below.
The Investment Manager does not consider it meaningful to assess foreign currency risk in isolation. As the Company’s net asset value
is denominated in US dollars, the Investment Manager considers net asset value to be the most appropriate measure of the overall
risk of the portfolio.
Impact on net assets ($’000) 2026 2025
US dollar weakened by 5% 46,374 46,116
US dollar strengthened by 5% (41,968) (41,731)
69
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STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
17. Financial Instruments continued
Market price risk
Market price risk is the risk that value of the instrument will fluctuate as a result of changes in market prices (other than those arising
from foreign currency risk and interest rate risk), whether caused by factors specific to an individual investment, its issuer, or all factors
affecting all instruments traded in the market.
Market price risk management
Market price risk is managed by the Investment Manager through:
(i) a disciplined stock selection and investment process; and
(ii) limiting exposure to individual investments through diversification and the application of investment restrictions.
The Board reviews the composition and performance of the investment portfolio at its regular meetings. Details of the portfolio’s
country and sector exposures, and the Company’s largest holdings, are set in the report and demonstrate the diversified nature of
theportfolio.
The Investment Manager has identified the MSCI Emerging Markets Index total return as a relevant reference point for the markets
in which the Company invests. The Company is managed on an active basis and not to track the performance of the MSCI Emerging
Markets Index total return, or any other index or benchmark. The Company’s performance is relative to the MSCI Emerging Markets
Index total return and is presented in the Financial Highlights section.
Market price risk – Investee Funds
The Company’s investments in Investee Funds are subject to the terms and conditions of the respective Investee Fund’s offering
documentation and are susceptible to market price risk arising from uncertainties about future values of those Investee Funds.
TheInvestment Manager undertakes due diligence when selecting and monitoring Investee Funds. Investee Funds in the portfolio are
managed by the Investment Manager who is compensated by the respective Investee Funds for their services. Such compensation
consists of an asset based fee and a performance based incentive fee and is reflected in the valuation of the Company’s investment
in each of the Investee Funds.
The exposure to investments in Investee Funds at fair value is disclosed as part of the note below and included in ‘Financial assets at
fair value through profit or loss’ in the Statement of Financial Position. The Company’s maximum exposure to loss from its interests in
Investee Funds is equal to the total fair value of these investments.
Total purchases in Investee Funds amounted $nil (2025: $nil). Total sales amounted to $740,000 (2025: $1,138,000). As at 30 June 2026
and 2025 there were no capital commitment obligations and no amounts due to Investee Funds for unsettled purchases.
Other price risk
Other price risk arises mainly from uncertainty about future prices of financial instruments. It represents the potential loss the Company
might suffer through price movements in its investment positions. The Board meets quarterly to consider the asset allocation of the
portfolio and the risk associated with particular industry sectors within the parameters of the investment objective.
The Investment Manager is responsible for actively monitoring the portfolio selected in accordance with the overall asset allocation
parameters and seeks to ensure that individual stocks also meet an acceptable risk/reward profile. Other price risks arising from
derivative positions, mainly due to the underlying exposures, are assessed by the Investment Manager’s specialist derivative
instruments team.
Other price risk sensitivity
The following table illustrates the sensitivity of the profit after taxation for the year and net assets to a 10% (2025:10%) increase or
decrease in the fair value of investments. This level of change is considered to be a reasonable illustration based on observation
ofcurrent market conditions. The sensitivity analysis is based on investments with all other variables held constant.
The other price sensitivity analysis is based on the valuation of investments directly held by the Company. For underlying investment
funds this is based on the net assets of such underlying funds as included in the Company’s portfolio of investments at reporting date.
The values of certain investments, in particular positions held in underlying funds may vary due to currency, interest rate and credit
risks and such risks are not directly considered in the other price risk sensitivity analysis.
70
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
Effect of a 10% increase/(decrease) in fair value:
2026 2025
10% increase
in fair value
$’000
10% decrease
in fair value
$’000
10% increase
in fair value
$’000
10% decrease
in fair value
$’000
Total profit after taxation for the year 76,745 (76,745) 71,286 (71,286)
Net assets 76,745 (76,745) 71,286 (71,286)
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with financial liabilities. The
Company’s assets mainly comprise readily realisable securities and derivative instruments which can be sold easily to meet funding
commitments if necessary. Short-term flexibility is achieved by the use of a bank overdraft, if required.
The liquidity risk profile of the Company was as follows:
30 June
2026
$’000
30 June
2025
$’000
Amounts due within one month
Securities purchased for future settlement 4,266 6,086
Amounts payable for repurchase of shares held in Treasury – 1,048
Amounts payable for repurchase of shares for cancellation 2,320 –
Amounts payable on settlement of derivatives 1,655 9
Derivative liabilities
1
19,627 10,773
Forward currency contracts 17,465 15,117
CFD interest payable 1,060 1,018
CFD dividends payable 1,000 1,111
Custodian fees 47 45
Investment management fees 444 365
Directors’ fees 76 66
Bank overdraft 7 –
Accrued expenses 276 143
Amounts due within one year
Derivative liabilities
1
2,515 5,011
Capital gains tax payable 1,344 2,140
Total liabilities 52,102 42,932
1. Includes CFDs, options and future contracts.
Liquidity risk management
The restrictions on concentration and the diversification requirements detailed above referred to under market price risk also assist in
mitigating liquidity risk by reducing exposure to individual investments and markets in which the Company operates.
The Company has no payables past their due dates as at 30 June 2026 (2025: nil).
Credit and counterparty risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment it has entered
into with the Company. Financial instruments may be adversely affected if any of the institutions with which money is deposited suffer
insolvency or other financial difficulties. All transactions are carried out with brokers that have been approved by the Investment Manager
and are settled on a delivery versus payment basis. Limits are set on the amount that may be due from any one broker and are kept
under review by the Investment Manager. Exposure to credit risk arises on outstanding security transactions and derivative instrument
contracts and cash at bank. The Company only engages with approved counterparties that are rated investment grade or above.
The Company has no receivables past their due dates as at 30 June 2026 (2025: nil).
71
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STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
17. Financial Instruments continued
Credit risk management
Certain derivative instruments in which the Company may invest are not traded on an exchange but instead will be traded between
counterparties based on contractual relationships, under the terms outlined in the International Swaps and Derivatives Association’s
(“ISDA”) market standard derivative legal documentation. These are known as Over The Counter (“OTC”) trades. As a result, the
Company is subject to the risk that a counterparty may not perform its obligations under the related contract. In accordance with
the risk management process which the Investment Manager employs, this risk is minimised by only entering into transactions with
counterparties which are believed to have an adequate credit rating at the time the transaction is entered into, by ensuring that formal
legal agreements covering the terms of the contract are entered into in advance, and through adopting a counterparty risk framework
which measures, monitors and manages counterparty risk by the use of internal and external credit agency ratings and evaluates
derivative instrument credit risk exposure.
The maximum exposure to credit risk at 30 June is the carrying amount of the financial assets as set out below.
30 June
2026
Amounts due
within 1 year
$’000
30 June
2025
Amounts due
within 1 year
$’000
Derivative assets
1
40,961 14,935
Forward currency contracts 17,653 15,188
Securities sold for future settlement 8,597 3,389
Amounts receivable on settlement of derivatives 1,085 1,632
Amounts held at futures clearing houses and brokers 42,884 52,521
Cash and cash equivalents 32,829 9,551
CFD dividends receivable 1,286 2,235
CFD interest receivable 32 –
Taxation recoverable 2,626 –
Accrued income 668 2,166
Other receivables 39 82
148,660 101,699
1. Includes CFDs, options and future contracts.
None of these assets are impaired or past due at the reporting date.
The Company primarily engages with counterparties that have strong credit ratings and a proven track record of financial stability,
thereby minimising the risk of default. The creditworthiness of its counterparties and investment positions are reviewed on a regular basis.
On this basis the Company has assessed the credit risk associated with its financial assets and concluded that the likelihood of credit
losses is minimal, and therefore, no provisions for expected credit losses have been made.
Collateral
For OTC and exchange traded derivative transactions, collateral is used to reduce the risk of both parties to the contract. Collateral is
managed on a daily basis for all relevant transactions and held in segregated collateral accounts. Collateral can be held by brokers
on behalf of the Company to reduce the credit risk exposure of the Company or held by the Company on behalf of brokers to reduce
the credit risk exposure of the brokers. All collateral received or pledged at reporting date is in form of cash. The value of collateral
received from brokers and pledged to brokers is shown below:
30 June 2026 30 June 2025
Collateral
received
$’000
Collateral
pledged
$’000
Collateral
received
$’000
Collateral
pledged
$’000
Bank of America Merrill Lynch International – – – 410
Goldman Sachs International Ltd 7,450 – 4,890 –
J.P. Morgan Securities plc – 2,170 – 970
Morgan Stanley & Co. International Ltd 9,650 – – 640
HSBC Bank plc – 160 380 –
UBS AG – 40,554 430 50,501
17,100 42,884 5,700 52,521
72
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
Derivative instrument risk
The risks and risk management processes which result from the use of derivative instruments, are set out in a Risk Management
Process document. Derivative instruments are used by the Investment Manager for the following purposes:
• to gain exposure to equity markets, sectors or individual investments;
• to hedge equity market risk in the Company’s investments with the intention of mitigating losses in the events market falls;
• to enhance portfolio returns by writing call and put options; and
• to take short positions in equity markets, sectors or individual investments which would benefit from a fall in the relevant market
price, where the Investment Manager believes the investment is overvalued. These positions distinguish themselves from other
short exposures held for hedging purposes since they are expected to add risk to the portfolio.
The risk and investment performance of these instruments are managed by an experienced, specialist derivative team of the
Investment Manager using portfolio risk assessment tools for portfolio construction.
Derivative instruments exposure sensitivity analysis
The Company invests in derivative instruments to gain or reduce exposure to the equity market. An increase of 10% in the share prices
of the investments underlying the derivative instruments at the reporting date would have increased the net profit after taxation for
the year and increased the net assets of the Company by $17,254,000 (2025: increased the net profit after taxation for the year
and increased the net assets of the Company by $10,074,000). A decrease of 10% in share prices of the investments underlying the
derivative instruments would have had an equal but opposite effect.
Offsetting
To mitigate counterparty risk for OTC derivative transactions, the ISDA legal documentation is in the form of a master agreement
between the Company and the brokers. This allows enforceable netting arrangements in the event of a default or termination event.
Derivative instrument assets and liabilities that are subject to netting arrangements have not been offset in preparing the Statement of
Financial Position.
The Company’s derivative instrument financial assets and liabilities recognised in the Statement of Financial Position and amounts that
could be subject to netting in the event of a default or termination are shown below:
Financial assets
Gross
amount
$’000
Gross amount
of recognised
financial
liabilities
set off on
the SoFP
1
$’000
Net amount
of financial
assets
presented on
the SoFP
1
$’000
Related amounts not set
off on SoFP
1
2026
Financial
instruments
$’000
Margin
account
received as
collateral
$’000
Net
amount
$’000
CFDs 30,873 – 30,873 (17,855) (9,650) 3,368
Options 5,054 – 5,054 (2,556) – 2,498
Futures contracts 5,034 – 5,034 – – 5,034
Forward currency
contracts 17,653 (17,465) 188 – – 188
58,614 (17,465) 41,149 (20,411) (9,650) 11,088
1. Statement of Financial Position
73
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
17. Financial Instruments continued
Financial liabilities
Gross
amount
$’000
Gross amount
of recognised
financial
assets
set off on
the SoFP
1
$’000
Net amount
of financial
liabilities
presented on
the SoFP
1
$’000
Related amounts not set
off on SoFP
1
2026
Financial
instruments
$’000
Margin
account
pledged as
collateral
$’000
Net
amount
$’000
CFDs (19,149) – (19,149) 17,855 – (1,294)
Options (2,993) – (2,993) 2,556 – (437)
Forward currency
contracts (17,465) 17,465 – – – –
(39,607) 17,465 (22,142) 20,411 – (1,731)
Financial assets
Gross
amount
$’000
Gross amount
of recognised
financial
liabilities
set off on
the SoFP
1
$’000
Net amount
of financial
assets
presented on
the SoFP
1
$’000
Related amounts not set
off on SoFP
1
2025
Financial
instruments
$’000
Margin
account
received as
collateral
$’000
Net
amount
$’000
CFDs 10,649 – 10,649 (8,072) (810) 1,767
Options 3,944 – 3,944 (1,900) – 2,044
Futures contracts 342 – 342 (342) – –
Forward currency
contracts 15,188 (15,117) 71 – – 71
30,123 (15,117) 15,006 (10,314) (810) 3,882
Financial liabilities
Gross
amount
$’000
Gross amount
of recognised
financial
assets
set off on
the SoFP
1
$’000
Net amount
of financial
liabilities
presented on
the SoFP
1
$’000
Related amounts not set
off on SoFP
1
2025
Financial
instruments
$’000
Margin
account
pledged as
collateral
$’000
Net
amount
$’000
CFDs (9,215) – (9,215) 8,072 640 (503)
Options (2,432) – (2,432) 1,900 – (532)
Futures contracts (4,137) – (4,137) 342 3,795 –
Forward currency
contracts (15,117) 15,117 – – – –
(30,901) 15,117 (15,784) 10,314 4,435 (1,035)
1. Statement of Financial Position
74
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
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
Level 2 Valued by reference to inputs other than quoted prices included 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 valuation techniques used by the Company are explained in Note 2(b). The table below sets
out the Company’s fair value hierarchy.
Financial assets at fair value through profit or loss
Level 1
$’000
Level 2
$’000
Level 3
$’000
2026
Total
$’000
Investments in equity securities 759,695 – – 759,695
Investee funds – – 7,750 7,750
Derivative instrument assets – CFDs – 30,873 – 30,873
Derivative instrument assets – forward currency contracts – 188 – 188
Derivative instrument assets – futures contracts 5,034 – – 5,034
Derivative instrument assets – options 5,021 33 – 5,054
769,750 31,094 7,750 808,594
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – CFDs – 18,774 375 19,149
Derivative instrument liabilities – options 2,523 470 – 2,993
2,523 19,244 375 22,142
75
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STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
17. Financial Instruments continued
Financial instruments classified under Level 2 are valued by reference to inputs other than quoted prices included in level 1 that are
observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. The Level 2 instruments include
forward currency contracts, over the counter option contracts and contracts for difference.
Financial assets at fair value through profit or loss
Level 1
$’000
Level 2
$’000
Level 3
$’000
2025
Total
$’000
Investments in equity securities 708,476 – – 708,476
Investee funds – – 4,385 4,385
Derivative instrument assets – CFDs – 10,649 – 10,649
Derivative instrument assets – forward currency contracts – 71 – 71
Derivative instrument assets – futures contracts 342 – – 342
Derivative instrument assets – options 3,846 98 – 3,944
712,664 10,818 4,385 727,867
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – CFDs – 9,215 – 9,215
Derivative instrument liabilities – futures contracts 4,137 – – 4,137
Derivative instrument liabilities – options 1,802 630 – 2,432
5,939 9,845 – 15,784
Valuation basis for Level 3 Investment
30 June
2026
$’000
30 June
2025
$’000
Net asset value 7,750 4,385
Intrinsic valuation approach for CFDs on restricted assets (375) –
7,375 4,385
As the key input into the valuation of Level 3 investments is official valuation statements from the investee funds and the adjusted most
recently available published price, we do not consider it appropriate to put forward a sensitivity analysis on the basis that insufficient
value is likely to be derived by the end users.
The following table summarises the change in value associated with Level 3 financial instruments carried at fair value during the year:
30 June 2026 30 June 2025
Level 3 Level 3
Movements in level 3 investments during the year
Non
Derivatives
$’000
Derivatives
$’000
Non
Derivatives
$’000
Derivatives
$’000
Opening balance 4,385 – 5,363 –
Sales (740) – (1,138) –
Transfers to Level 1 – – (1,466) –
Transfers from Level 2 – (375) – –
Realised gains/(losses) 694 – (7,589) –
Net change in unrealised gains 3,411 – 9,215 –
Closing balance 7,750 (375) 4,385 –
76
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
17. Financial Instruments continued
The Company’s holdings in non derivative Russian securities have been fair valued at $nil as at 30 June 2026 (2025 : $nil) as a result
of trading being suspended on international stock exchanges. These non derivative Russian securities have an acquisition cost of
$90,933,000 as at 30 June 2026 (2025: $90,933,000).
The Company’s policy is to recognise transfers in and transfers out of the fair value hierarchy level at the end of each accounting
period. Financial assets or liabilities measured at fair value are reclassified between levels of the fair value hierarchy when changes
in the valuation methodology justify a different classification.
Russian securities
The Company continues to hold investments in Russian securities, which are subject to market, liquidity and valuation uncertainties
arising from restrictions affecting the Russian market.
The Company’s exposure to Russian securities as at 30 June 2026 has remained unchanged from 30 June 2025. Details of the
holdings are set out in the table below.
30 June 2026
Security name Holdings
Cost
$’000
Fair value
immediately
prior to
restrictions
28February
2022
$’000
Fair Value
$’000
Gazprom 10,398,354 51,236 9,899 –
Sberbank of Russia – preference shares 1,964,397 8,373 1,033 –
Sberbank of Russia – common stock 589,205 1,457 308 –
PhosAgro – common stock 266,417 9,530 16,312 –
PhosAgro – GDR 5,150 9,530 16 –
Novolipetsk Steel 1,990,470 5,704 7,663 –
United Company Rusal 4,519,809 5,103 1,126 –
90,933 36,357 –
Capital Risk Management
The capital of the Company is represented by the equity attributable to holders of Participating Preference Shares. The Company’s
objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for
shareholders and to maintain a strong capital base to support the achievement of its investment objective.
The Board monitors and reviews the Company’s capital structure on an ongoing basis and seeks to maintain an appropriate balance
between the interest of shareholders and the ability to achieve the Company’s investment strategy.
77
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notes to the Financial Statements continued
18. Capital Resources and Gearing
The Company does not have any externally imposed capital requirements. The financial resources of the Company comprise its share
capital, reserves and gearing, which are disclosed on the Statement of Financial Position. The Company is managed in accordance
with its investment policy and in pursuit of its investment objective, both of which are detailed in the Strategic Report. The principal
risks and their management are disclosed in the Strategic Report on pages 19 to 28.
The Company’s gearing at the year end is set out below:
30 June 2026
Gross gearing Net gearing
Exposure
$’000 %
1
Exposure
$’000 %
1
Investments 767,445 88.8 767,445 88.8
Long CFDs 572,585 66.3 572,585 66.3
Long futures contract 6,954 0.8 6,954 0.8
Long call options 19,404 2.2 19,404 2.2
Long put options 12,662 1.5 12,662 1.5
Total long exposures before hedges 1,379,050 159.6 1,379,050 159.6
Less: Hedged futures contract exposures (205,692) (23.8) (205,692) (23.8)
Less: Hedged option exposures (10,413) (1.2) (10,413) (1.2)
Total long exposures after the netting of hedges
2
1,162,945 134.6 1,162,945 134.6
Short CFDs 199,865 23.1 (199,865) (23.1)
Short futures contract 23,282 2.7 (23,282) (2.7)
Gross Asset Exposure/net exposure 1,386,092 160.4 939,798 108.8
Net Assets 864,003 864,003
Gearing
3
60.4% 8.8%
1. Exposure to the market expressed as a percentage of Net Assets per the Statement of Financial Position.
2. Hedges as defined within the Glossary on page 88.
3. Gearing is the amount by which Gross Asset Exposure/net exposure exceeds Net Assets expressed as a percentage of Net Assets.
30 June 2025
Gross gearing Net gearing
Exposure
$’000 %
1
Exposure
$’000 %
1
Investments 712,861 92.4 712,861 92.4
Long CFDs 433,157 56.1 433,157 56.1
Long futures contract 16,965 2.2 16,965 2.2
Long put options 21,474 2.8 21,474 2.8
Long call options 12,313 1.6 12,313 1.6
Total long exposures before hedges 1,196,770 155.1 1,196,770 155.1
Less: Hedged futures contract exposures (160,910) (20.9) (160,910) (20.9)
Less: Hedged option exposures (10,949) (1.4) (10,949) (1.4)
Total long exposures after the netting of hedges
2
1,024,911 132.8 1,024,911 132.8
Short CFDs 180,705 23.4 (180,705) (23.4)
Short futures contract 28,958 3.8 (28,958) (3.8)
Short put options 680 0.1 (680) (0.1)
Gross Asset Exposure/net exposure 1,235,254 160.1 814,568 105.5
Net Assets 771,628 771,628
Gearing
3
60.1% 5.5%
1. Exposure to the market expressed as a percentage of Net Assets per the Statement of Financial Position.
2. Hedges as defined within the Glossary on page 88.
3. Gearing is the amount by which Gross Asset Exposure/net exposure exceeds Net Assets expressed as a percentage of Net Assets.
78
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Financial Statements continued
19. Transactions with the Managers and Related Parties
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management
to FIL Investments International (“FII”). Both companies are Fidelity group companies.
Details of the current fee arrangements are given in Note 4 and Note 5. During the year, the Company had the following transactions
payable to FII:
30 June
2026
$’000
30 June
2025
$’000
Investment management fees 4,668 4,314
Marketing services 468 334
At the year end, the following balances were accrued and outstanding to FII. These balances are included within the other payables
figure in Note 13.
30 June
2026
$’000
30 June
2025
$’000
Investment management fees 444 365
Marketing services 48 43
As at 30 June 2026, the Board consisted of five non-executive Directors (as shown on pages 29 and 30)) all of whom are considered
to be independent by the Board. None of the Directors has a service contract with the Company.
The Directors’ beneficial interests in the share capital of the Company and the annual fee structure from 1 July 2026 are shown on
page 38.
The Directors received for the financial year fees totalling $307,241, (2025: $263,694). The breakdown of the fees and related party
interests is shown in the Directors’ Remuneration Report on page 38. Directors’ expenses for the year, as stated in Note 5, include
travelling, hotel and other expenses which the Directors are entitled to when properly incurred by them in travelling to, attending and
returning from meetings and while on other business of the Company.
20. Ultimate Controlling Party
In the opinion of the Directors on the basis of the shareholdings advised to them, the Company has no immediate or ultimate
controlling party.
21. Segment Information
The Directors have considered the basis on which information is presented to them and have concluded that the Company is engaged in a
single operating segment, being the management of a diversified portfolio of investments in emerging markets.
All of the Company’s activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating
decisions are based on analysis of the Company operating in one segment.
The financial positions and results from this segment are equivalent to those presented in the financial statements of the Company as
internal reports are prepared on a basis consistent with the measurement and recognition principles of IFRS.
A breakdown of the Company’s financial assets at fair value through profit and loss is shown in the Country exposure of the
Company’s portfolio on page 16.
The Company is domiciled in Guernsey. All investment income is derived from investments in entities located outside Guernsey.
22. Subsequent events
No significant events have occurred since the end of the reporting date which would impact on the financial position of the Company
disclosed in the Statement of Financial Position as at 30 June 2026 or on the financial performance and cash flows of the Company
for the year ended on that date.
79
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
The Company uses the following as Alternative Performance Measures which are all defined in the Glossary to the Annual Report on
pages 87 to 89.
Active Share
Active Share is a measure of the percentage which stock holdings in the Company differ from the constituents of the benchmark, the
MSCI Emerging Markets Index. Active share is calculated by taking the sum of the absolute difference between the weights of the
holdings in the Company and those in the MSCI Emerging Markets Index and dividing the result by two. See The Year at a Glance
inside the front cover of this report for further details.
Discount/Premium
The discount/premium is the difference between the NAV per Participating Preference Share of the Company and the share price and
is expressed as a percentage of the NAV per Participating Preference Share. Details of the Company’s discount are on the Financial
Highlightspage.
Gearing
See Note 18 on page 77 for details of the Company’s gearing.
Net Asset Value (“NAV”) per Participating Preference Share
See the Statement of Financial Position on page 49 and Note 16 on page 65 for further details.
Ongoing charges ratio
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of management fees and
other expenses expressed as a percentage of the average net assets throughout the year.
30 June
2026
30 June
2025
Investment management fees ($’000) 4,668 4,314
Other expenses ($’000) 2,206 1,644
Ongoing charges ($’000) 6,874 5,958
Average net assets ($’000) 786,510 715,976
Ongoing charges ratio 0.87% 0.83%
Total Return Performance
NAV per share total return includes reinvestment of the dividend in the NAV of the Company on the ex-dividend date. Share price total
return includes the reinvestment of the net dividend in the month that the share price goes ex-dividend.
The tables below provide information relating to the NAV per share and share prices of the Company, the impact of the dividend
reinvestments and the total returns for the years ended 30 June 2026 and 30 June 2025.
2026
Net asset
value per
share
Share
price
30 June 2025 875.15p 783.00p
30 June 2026 1,653.34p 1,530.00p
Change in the year +88.9% +95.4%
Impact of dividend reinvestment +3.4% +3.9%
Total return for the year +92.3% +99.3%
2025
Net asset
value per
share
Share
price
30 June 2024 798.47p 703.00p
30 June 2025 875.15p 783.00p
Change in the year +9.6% +11.4%
Impact of dividend reinvestment +2.0% +2.3%
Total return for the year +11.8% +14.0%
Alternative Performance Measures
80
Fidelity Emerging Markets Limited | Annual Report 2026
Securities Financing Transactions Regulation
(“SFTR”)
Securities Financing Transactions (Unaudited)
The Company engages in Securities Financing Transactions (SFT) (as defined in Article 3 of Regulation (EU) 2015/2365, securities
financing transactions include repurchase transactions, securities or commodities lending and securities or commodities borrowing,
buysell back transactions or sell-buy back transactions and margin lending transactions). In accordance with Article 13 of the Regulation,
the Company’s involvement in and exposures related to SFT for the accounting year ended 30 June 2026 are detailed below.
Global Data
Amount of securities on loan
During the year ended 30 June 2026, the Company was not engaged in securities lending. The total value of securities on loan as a
proportion of the Company’s total lendable assets, as at the statement of financial position date, is nil.
Amount of assets engaged in CFDs
The following disclosures relate to CFDs held by the Company which may be considered Total Return Swaps under the SFTR.
As at 30 June 2026, all CFDs were contracted bilaterally with open maturities:
Broker
Fair Value
$’000
Percentage of
Net Assets
Collateral held
by the broker
$’000
Collateral held
by the Company
$’000
Goldman Sachs International (UK) (772) (0.09%) 7,450 –
HSBC Bank plc (UK) 339 0.04% – 160
J.P. Morgan Securities plc (UK) 2,058 0.24% – 2,170
Morgan Stanley & Co International (UK) 10,621 1.23% 9,650 –
UBS AG (UK) (522) (0.06%) – –
Collateral held by the broker was denominated in US dollars and held in a segregated account on behalf of the Company with a
maturity of one day.
Settlement and clearing
OTC derivative transactions are entered into by the Fund under an International Swaps and Derivatives Associations, Inc. Master
Agreement (“ISDA Master Agreement”) or similar agreement. An ISDA Master Agreement is a bilateral agreement between the
Company and a counterparty that governs OTC derivative transactions (including CFDs) entered into by the parties. All OTC derivative
transactions entered under an ISDA Master agreement are netted together for collateral purposes.
Share of collateral received that is reused and reinvestment return
Collateral received for CFD positions is kept in segregated accounts with the brokers and is not reinvested by the Company. There are
no returns from reinvestment of collateral received.
Return and cost
All returns from CFDs are earned by the Company. Information about returns and costs related to CFDs is disclosed in Note 3 Income,
Note 6 Finance Costs and Note 11 Derivative Instruments.
81
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of Fidelity Emerging Markets Limited (the “Company”) will be held
at the registered office of the Company, Level 3, Mill Court La Charroterie, St Peter Port, Guernsey GY1 1EJ, on Tuesday,
1December 2026 at 8:30 a.m. to consider and if thought fit, to pass the following resolutions which will be proposed as
ordinary resolutions and special resolutions as set out below:
ORDINARY BUSINESS
To be proposed as ordinary resolutions:
1. To receive the Report of the Directors and audited Financial
Statements for the year ended 30 June 2026.
2. To approve the Directors’ Remuneration Report for the year
ended 30 June 2026.
3. To re-appoint KPMG Audit Limited as Independent Auditor to
the Company.
4. To authorise the Directors to agree the remuneration of the
Independent Auditor.
5. To declare a final dividend of $0.33 per share designated as a
Participating Redeemable Preference Share (the “Participating
Preference Shares”) to be paid in respect of the financial year
ended 30 June 2026.
6. To re-elect Ms Heather Manners as a Director of the Company.
7. To re-elect Dr Simon Colson as a Director of the Company.
8. To re-elect Mr Torsten Koster as a Director of the Company.
9. To re-elect Mr Mark Little as a Director of the Company.
10. To elect Dr Shefaly Yogendra as a Director of the Company.
SPECIAL BUSINESS
Ordinary Resolutions
11. THAT the Company shall continue in being as an investment
company for the period expiring at the end of the AGM of the
Company to be held in 2031.
12. THAT the Directors be generally and unconditionally authorised
to allot and issue, grant rights to subscribe for, or to convert
securities into, up to 12,698,994 Participating Preference Shares
(being 33.33 per cent. of the Company’s shares of each
class in issue as at the latest practicable date prior to the
date of publication of this document (excluding shares held
in treasury)) for the period expiring on the date falling fifteen
months after the date of passing of this Resolution 12 or the
conclusion of the next annual general meeting of the Company,
whichever is the earlier, save that the Company may before
such expiry make an offer or agreement which would or might
require shares to be allotted and issued after such expiry and
the Directors may allot and issue shares in pursuance of such
an offer or agreement as if the authority had not expired.
Special Resolutions
To be proposed as special resolutions:
13. THAT, In substitution for the Company’s existing authority to
make market purchases of Participating Preference Shares,
the Company is authorised to make market purchases of
Participating Preference Shares, PROVIDED THAT:
(a) the maximum number of Participating Preference Shares
that may be purchased shall be 5,711,308 being 14.99%
of the issued number of Participating Preference Shares
(excluding shares held in treasury) as at the latest
practicable date prior to the date of publication of this
document or, if lower, such number as is equal to 14.99%
of the issued number of Participating Preference Shares
(excluding shares held in treasury) at the date of passing
the resolution;
(b) the maximum price which may be paid for a Participating
Preference Share is an amount equal to 105% of
the average of the middle market quotations for a
Participating Preference Share taken from the London
Stock Exchange Daily Official List for the five business
days immediately preceding the day on which the
Participating Preference Share is purchased;
(c) the authority hereby conferred shall expire at the
conclusion of the next Annual General Meeting of the
Company unless such authority is renewed prior to such
time; and
(d) the Company may make a contract to purchase
Participating Preference Shares under the authority hereby
conferred prior to the expiry of such authority which will or
may be executed wholly or partly after the expiration of
such authority and may make a purchase of Participating
Preference Shares pursuant to any such contract.
14. THAT, in accordance with Article 9(4) of the articles of
incorporation of the Company (the “Articles”), the Directors
be empowered to allot and issue (or sell from treasury)
3,810,079 Participating Preference Shares (being 10 per
cent. of the such Shares in issue of each class as at the latest
practicable date prior to the date of this notice (excluding
shares held in treasury)) for cash as if Article 9.4 of the
Articles did not apply to the allotment and issue (or sale
from treasury) for the period expiring on the date falling
fifteen months after the date of passing of this Resolution 14
or the conclusion of the next annual general meeting of the
Company, whichever is the earlier, save that the Company
may before such expiry make offers or agreements which
would or might require shares to be allotted and issued (or
sold) after such expiry and the Directors may allot and issue
(or sell) shares in pursuance of any such offer or agreement
notwithstanding that the power conferred by this Resolution
14 has expired.
15. THAT with effect from the passing of this resolution, the
draft amended Articles of Incorporation produced to the
meeting and, for the purpose of identification, initialled by
the Chairman, be adopted as the Articles of Incorporation of
the Company in substitution for, and to the exclusion of, the
existing Articles of Incorporation of the Company.
16. THAT a general meeting (other than an annual general
meeting) of the Company may be called on not less than 14
clear days’ notice, provided that this authority shall expire at the
conclusion of the next annual general meeting of the Company.
82
Fidelity Emerging Markets Limited | Annual Report 2026
Notes to the Notice of Meeting
1. A member of the Company who is entitled to attend the AGM
is entitled to appoint one or more proxies to attend speak
and vote in his or her place. A proxy does not need to be
a member of the Company but must attend the meeting to
represent you. Details of how to appoint the Chairman of
the meeting or another person as your proxy using the proxy
form are set out in the notes to the proxy form. If you wish
your proxy to speak on your behalf at the meeting you will
need to appoint your own choice of proxy (not the Chairman)
and give your instructions directly to them. A member may
appoint more than one proxy to attend the meeting provided
that each proxy is appointed to exercise rights attached to
different shares.
2. To allow effective constitution of the AGM, if it is apparent
to the Chairman that no members of the Company will be
present in person or by proxy, other than by proxy in the
Chairman’s favour, the Chairman may appoint a substitute
to act as proxy in his stead for any member, provided that
such substitute proxy shall vote on the same basis as the
Chairman.
3. A form of proxy is enclosed which should be completed in
accordance with the instructions. To be valid, the form of
proxy (together with the power of attorney or other authority
(if any) under which it is signed or a notarially certified copy
of such authority) must be deposited with the Company’s
Registrar Computershare Investor Services (Guernsey) Limited,
c/o the Pavilions, Bridgwater Road, Bristol BS99 6ZY by not
less than 48 hours before the time for holding the meeting
or any adjournment thereof at which the person named in
the instrument proposes to vote. Completion of the form of
proxy will not preclude a member from attending and voting
in person, your proxy appointment will automatically be
terminated.
4. To change your proxy instructions simply submit a new proxy
form using the methods set out above and in the notes to the
proxy form. Note that the cut-off date and time for receipt of
a proxy form (see above) also apply in relation to amended
instructions; any amended proxy form received after the
relevant cut-off date and time will be disregarded. If you
submit more than one valid proxy form, the form received
last before the latest time for the receipt of proxies will take
precedence.
5. In order to revoke a proxy instruction you will need to inform
the Company by sending a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to
the Company’s Registrar. In the case of a member which
is an individual the revocation notice must be under the
hand of the appointer or of his attorney duly authorised in
writing or in the case of a member which is a company,
the revocation notice must be executed under its common
seal or under the hand of an officer of the company or
an attorney duly authorised. Any power of attorney or any
other authority under which the revocation notice is signed
(or a notarially certified copy of such power or authority)
must be included with the revocation notice. The revocation
notice must be received by 8:30 a.m. on 29 November 2026.
If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject
to the paragraph directly below, your proxy appointment will
remainvalid.
6. The Company gives notice that those Shareholders entered
on the register of members of the Company at 8:30 a.m.
on 29 November 2026 (or their duly appointed proxies) will
be entitled to attend and vote at the aforesaid meeting in
respect of the number of shares registered in their name at
that time. Changes to the entries on the register after that
time will be disregarded in determining the rights of any
person to attend or vote at the AGM.
Notice of Annual General Meeting continued
83
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Administration
Registered Office
Level 3, Mill Court
La Charroterie
St Peter Port
Guernsey GY1 1EJ
Website
www.fidelity.co.uk/emergingmarkets
Alternative Investment Fund Manager
FIL Investment Services (UK) Limited
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey KT20 6RP
Investment Manager and Company Secretary
FIL Investments International
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey KT20 6RP
Custodian
JP Morgan Chase Bank
25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom
(Authorised and regulated by the United Kingdom’s
Financial Conduct Authority)
Administrator
J.P. Morgan Administration Services (Guernsey) Limited
Level 3, Mill Court
La Charroterie
St Peter Port
Guernsey GY1 1EJ
(Authorised and regulated by the Guernsey Financial
Service Commission)
Registrar
Computershare Investor Services
(Guernsey) Limited
C/o 13 Castle Street
St. Helier
Jersey JE1 1ES
Channel Islands
Telephone: +44 (0) 370 707 4040
www.investorcentre.co.uk/je
Stockbrokers
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
United Kingdom
Independent Auditor
KPMG Audit Limited
Glategny Court
Glategny Esplanade
St. Peter Port
Guernsey GY1 1WR
84
Fidelity Emerging Markets Limited | Annual Report 2026
Data Protection
What personal data is collected and how it is used
The Company is an investment company with limited liability domiciled in Guernsey and has certain regulatory obligations such
as the requirement to send documents to its shareholders, for example, the Annual Report and other documents that relate
to meetings of the Company. The Company will therefore collect shareholders’ personal data such as names, addresses and
identification numbers or investor codes and will use this personal data to fulfil its statutory obligations.
Any personal data collected will be kept securely on computer systems and in some circumstances on paper. Personal
information is kept secure in line with Fidelity’s Information Security policies and standards. If you are unhappy with how we have
used your personal data, you can complain by contacting the UK Data Protection Officer at Fidelity International, Beech Gate,
Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Sharing personal data
In order to assist the Company in meeting its statutory requirements, the Company delegates certain duties around the processing
of this data to its third party service providers, such as the Company’s Registrar and Printers. The Company has appointed Fidelity
to undertake marketing activities for the Company and their privacy statement can be found on the Company’s website at
https://investment-trusts.fidelity.co.uk/privacy-policy/
The Company’s agreements with the third party service providers have been updated to be compliant with data protection
requirements. The Company confirms to its shareholders that their data will not be shared with any third party for any other purpose,
such as for marketing purposes. In some circumstances, it may be necessary to transfer shareholders’ personal data across national
borders to Fidelity Group entities operating in the European Economic Area (“EEA”). Where this does occur, the European standard of
protections will be applied to the personal data that is processed. Where personal data is transferred within the Fidelity Group, but
outside of the EEA, that data will subsequently receive the same degree of protection as it would in the EEA.
Retention Period
We will keep the personal data for as long as is necessary for these purposes and no longer than we are legally permitted to
doso.
Requesting access, making changes to your personal data and other important information
Shareholders can access the information that the Company holds about them or ask for it to be corrected or deleted by
contacting Fidelity’s UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP.
Fair treatment of investors
The legal and regulatory regime to which the Company and the Directors are subject ensures the fair treatment of investors. The
Listing Rules require that the Company treats all Shareholders of the same class of shares equally. In particular, the Directors have
certain statutory duties under the Companies (Guernsey) Law, 2008 with which they must comply. These include a duty upon each
Director to act in the way she or he considers, in good faith, would be most likely to promote the success of the Company for the
benefit of its members as a whole.
Data Protection
85
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
In compliance with the Alternative Investment Fund Managers’ Directive (“AIFMD”), the Board has appointed FIL Investment Services (UK)
Limited (“FISL”) as the Company’s Alternative Investment Fund Manager (“AIFM”). FISL has delegated the investment management to
FILInvestments International (“FII”) and the company secretarial function.
Details of the current Management Agreement can be found in the Strategic Report on pages 19 to 28.
The table below discloses information required by the Alternative Investment Fund Managers’ Regulations 2013.
Function AIFM Role and Responsibility AIFMD Disclosure
Investment management The AIFM provides portfolio management of assets
and investment advice in relation to the assets
of the Company. It has delegated this function to
FILInvestments International (“FII”).
The Board remains responsible for setting the
investment strategy, investment policy and
investment guidelines and the AIFM operates within
these guidelines.
Details of the Company’s investment objective,
strategy and investment policy, including limits,
areon pages 20 and 21.
Risk management The AIFM has a responsibility for risk management
for the Company which is in addition to the Board’s
corporate governance responsibility for risk
management.
The Company has a Risk Management Process
Document which is agreed with the Board and
demonstrates that risk management is separated
functionally and hierarchically from operating units
and demonstrates independence safeguards. The
Manager maintains adequate risk management
systems in order to identify, measure and monitor
allrisks at least annually under AIFMD. The
Manager is responsible for the implementation
of various risk activities such as risk systems,
riskprofile, risk limits and testing.
The Board, as part of UK corporate governance,
remains responsible for the identification of
significant risks and for the ongoing review of
the Company’s risk management and internal
controlprocesses.
The AIFM has an ongoing process for identifying,
evaluating and managing the principal risks faced
by the Company and this is regularly reviewed
by the Board. The Board remains responsible for
the Company’s system of risk management and
internal controls and for reviewing its effectiveness.
Further details can be found in the Strategic
Report on pages 19 to 28 and in Note 17 to
the Financial Statements on pages 65 to 76.
Valuation of illiquid
assets
AIFMD requires the disclosure of the percentage
of the Alternative Investment Fund’s assets which
are subject to special arrangements arising from
their illiquid nature and any new arrangements for
managing the liquidity of the Company.
As at the date of this report, none of the Company’s
assets is subject to special arrangements arising
from its illiquid nature.
Alternative Investment Fund Manager’s Disclosure
(unaudited)
86
Fidelity Emerging Markets Limited | Annual Report 2026
Function AIFM Role and Responsibility AIFMD Disclosure
Leverage The Company may be geared through (i) borrowing
of up to 10% of its net asset value and/or (ii)
by entering into derivative positions (both long
and short) which have the effect of gearing the
Company’s portfolio, to enhance performance.
The AIFM has set maximum levels of leverage that
are reasonable. It has implemented systems to
calculate and monitor compliance against these
limits and has ensured that the limits have been
complied with at all times.
There are two methods of calculating leverage –
theGross Method which does not reduce exposure
for hedging; and the Commitment Method which
does reduce exposure for hedging.
The maximum leverage limits are 2.50 for the Gross
Method of calculating leverage and 2.00 for the
Commitment Method.
At 30 June 2026, actual leverage was 2.18 for the
Gross Method and 1.74 for the Commitment Method.
Liquidity management The AIFM, in consultation with the Board, maintains
a liquidity management policy which is considered
at least annually.
The Company’s assets mainly comprise readily
realisable securities and derivative instruments
which can be sold easily to meet funding
commitments if necessary.
Further details can be found in Note 17 on page70.
Remuneration of the
AIFM
The AIFM operates under the terms of Fidelity’s
Global Remuneration Policy Statement. This ensures
that the AIFM complies with the requirements of
the FCA’s Remuneration Code (SYSC19A); the AIFM
Remuneration Code (SYSC19B) and the BIPRU
Remuneration Code (SYSC19C).
Details of Fidelity International’s Global
Remuneration Policy can be found at
www.fidelityinternational.com/global/
remuneration/default.page
Alternative Investment Fund Manager’s Disclosure
(unaudited) continued
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Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERS FINANCIAL
Glossary to the Annual Report
ACTIVE SHARE
Active Share is a measure of the percentage by which stock
holdings in the Company differ from the constituents of the
benchmark, the MSCI Emerging Markets Index. Active share is
calculated by taking the sum of the absolute difference between
the weights of the holdings in the Company and those in the
MSCI Emerging Markets Index and dividing the result by two.
ADR (AMERICAN DEPOSITARY RECEIPT)
A negotiable certificate issued by a US bank representing a
specified number of shares in a foreign stock that is traded on
aUS Exchange.
AIC
The Association of Investment Companies (“AIC”). The Company
is a member of the AIC.
AIF
Alternative Investment Fund (“AIF”). The Company is an AIF.
AIFM
Alternative Investment Fund Manager (“AIFM”). The Board has
appointed FIL Investment Services (UK) Limited to act as the
Company’s AIFM.
AIFMD
The Alternative Investment Fund Managers Directive (“AIFMD”)
isa European Union Directive implemented on 22 July 2014.
ALTERNATIVE PERFORMANCE MEASURES
The Company uses the following Alternative Performance
Measures which are all defined in this Glossary:
• Active Share
• Discount/Premium;
• Gearing (Gross and Net);
• Net Asset Value (NAV) per Participating Preference Share;
• Ongoing Charges ratio;
• Total Return Performance (Net Asset Value Total Return or
Share Price Total Return)
ASSET EXPOSURE
The value of an underlying security or instrument to which
the Company is exposed, whether through direct or indirect
investment (including the economic value of the exposure in the
underlying asset of derivative).
AUDITOR
KPMG Audit Limited, or such other auditor, as the Company
may appoint from time to time. KPMG Channel Islands Limited
changed its name to KPMG Audit Limited from 1 October 2025.
BENCHMARK INDEX (THE INDEX)
The Company’s benchmark index, the MSCI Emerging
MarketsIndex.
COLLATERAL
Assets provided as security.
CONTRACT FOR DIFFERENCE (CFD)
A contract for difference is a derivative. It is a contract between
the Company and an investment bank at the end of which the
parties exchange the difference between the opening price and
the closing price of the underlying asset of the specified financial
instrument. It does not involve the Company buying or selling the
underlying asset, only agreeing to receive or pay the movement
in its share price. A contract for difference allows the Company
to gain access to the movement in the share price by depositing
a small amount of cash known as margin. The Company may
reason that the asset price will rise, by buying (“long” position)
or fall, by selling (“short” position). If the Company holds long
positions, dividends are received and interest is paid. If the
Company holds short positions, dividends are paid and interest
is received.
CUSTODIAN
An entity that holds (as intermediary) the Company’s assets,
arranges the settlement of transactions and administers income,
proxy voting and corporate actions. The Company’s Custodian
isJPMorgan Chase Bank.
DERIVATIVES
Financial instruments whose value is derived from the value of
an underlying asset or other financial instruments. The main
categories of derivatives are contracts for difference, warrants,
futures and options.
DISCOUNT
If the share price of the Company is lower than the Net Asset
Value per Participating Preference Share, the Company’s shares
are said to be trading at a discount. It is shown as a percentage
of the Net Asset Value per Participating Preference Share.
EARNINGS
The earnings generated in a given period from investments:
• Revenue Earnings – reflects the dividends and interest from
investments and other income, net of expenses, finance costs
and taxation;
• Capital Earnings – reflects the return on capital, excluding
any revenue earnings; and
• Total Earnings – reflects the aggregate of revenue and
capital earnings.
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Fidelity Emerging Markets Limited | Annual Report 2026
EQUITY LINKED NOTES (ELNS)
Debt instruments whose return on investment is linked to specific
equities or equity markets. The return on equity linked notes may
be determined by an equity index, a basket of equities, or a
single equity.
EQUITY SHAREHOLDERS’ FUNDS
Also described as Net Asset Value, Shareholders’ Funds represent
the total value of the Company’s assets less the total value of its
liabilities as shown in the Statement of Financial Position.
FAIR VALUE
The fair value is the best estimate of the value of the investments,
including derivatives, at a point in time and this is measured as:
• Listed investments – valued at bid prices or last market prices,
where available, otherwise at published price quotations;
• Unlisted investments – valued using an appropriate valuation
technique in the absence of an active market;
• Contracts for difference – valued as the difference between
the settlement price of the contract and the value of the
underlying shares in the contract (unrealised gains or losses);
• Futures contract and options – valued at the quoted trade
price for the contract; and
• Forward currency contracts – valued at the appropriate
quoted forward foreign exchange rate ruling at the Statement
of Financial Position date.
FIDELITY
FIL Investments International.
FIL LIMITED
The ultimate parent company of the FIL Group of companies.
Incorporated in Bermuda.
FIL
FIL Limited and each of its subsidiaries.
FORWARD CURRENCY CONTRACT
Agreement to buy or sell a currency at a specified future date
and at a pre-agreed price.
FOUNDERS SHARES
Shares issued on 6 June 1989 to Genesis Investment
Management LLP (“GIML”) or its nominees at a par value of
US$1 per share. The shares were subsequently redesignated
as no par value shares. On 7 October 2021, all Founder Shares
were transferred to FIL Investments International.
FUTURE OR FUTURES CONTRACT
An agreement to buy or sell a stated amount of a security,
currency or commodity at a specific future date and at a
preagreed price.
GROSS ASSET EXPOSURE
The value of the portfolio to which the Company is exposed,
whether through direct or indirect investment (including the
economic value of the exposure in the underlying asset of the
derivatives, but excluding forward currency contracts).
GEARING
The economic exposure of the portfolio to its underlying assets in
excess of total net assets. It represents the additional exposure to
the market above Equity Shareholders’ Funds. The Company uses
two measures of gearing:
• Gross gearing which is the amount by which Gross Asset
Exposure exceeds Equity Shareholders’ Funds expressed as
apercentage of Equity Shareholders’ Funds.
• Net gearing which is the amount by which Net Asset
Exposure exceeds Equity Shareholders’ Funds expressed as
apercentage of Equity Shareholders’ Funds.
HEDGES
Short positions that demonstrate risk-reduction qualities by
offsetting long positions held by the Company which have
regional congruence and a correlation of at least 80% to the
Long Exposure of the Company.
INVESTMENT MANAGER
FIL Investments International.
LONG EXPOSURE
The value of the Company’s direct and indirect investments in
long positions (including the economic value of the exposure to
the reference asset of any derivative instrument).
MANAGER
FIL Investment Services (UK) Limited is the appointed Manager
under the Alternative Investment Fund Managers’ Directive
(“AIFMD”) and has delegated the investment management of the
Company to the Investment Manager.
MSCI EMERGING MARKETS INDEX
The Benchmark Index of the investment performance of the
Company, in UK sterling terms.
NET ASSET VALUE PER PARTICIPATING PREFERENCE SHARE
TOTAL RETURN
NAV per Participating Preference Share Total Return is a measure
showing how the NAV per Participating Preference Share has
performed over a period of time, taking into account dividends
paid to shareholders. Total Return measures allow shareholders
to compare performance between investment funds where the
dividend paid may differ. To calculate Total Return, it is assumed
that dividends are reinvested into the assets of the Company at
the prevailing NAV on the last day of the month that the shares
first trade ex-dividend.
NET ASSET VALUE PER PARTICIPATING PREFERENCE SHARE
Net Assets are the value of the Company’s assets less its
liabilities. Net Asset Value (‘NAV’) per Participating Preference
Share is the Net Assets divided by the number of Participating
Preference Shares in issue.
NET ASSETS
The value of the Company’s assets minus its liabilities.
Glossary to the Annual Report continued
89
Annual Report 2026 | Fidelity Emerging Markets Limited
STRATEGYGOVERNANCEFINANCIALINFORMATION FOR SHAREHOLDERSINFORMATION FOR SHAREHOLDERS
Glossary to the Annual Report continued
NET MARKET EXPOSURE
Net positive market exposure of the Company’s portfolio, whether
through direct or indirect investment, with short and hedge
positions subtracted from long positions. It is calculated as
(LongExposure – Hedges) – Short Exposure.
ONGOING CHARGES RATIO
The ongoing charges ratio is a measure used to estimate the
expenses likely to occur in the foreseeable future. It is calculated
by dividing the annualised ongoing charges (total operating
expenses excluding transaction costs and one-off charges) by the
average month end net asset values of the Company for the year
under review and has been prepared in accordance with the
AIC’s recommended methodology.
OPTIONS
An option is a contract which gives the right but not the
obligation to buy or sell an underlying asset at an agreed price
on or before an agreed date. Options may be call or put and
are used to gain or reduce exposure to the underlying asset on
aconditional basis.
PORTFOLIO
The Company’s portfolio which may be made up of equities,
index linked securities, equity linked notes and other debt
securities, cash deposits, money market instruments, foreign
currency exchange transactions and other interests including
derivatives (such as futures, options and contracts for difference).
PORTFLIO MANAGERS
The Company’s Portfolio Managers are Nick Price and Chris Tennant.
PREMIUM
If the share price of the Company is higher than the net asset
value per ordinary share, the Company’s shares are said to be
trading at a premium. The premium is shown as a percentage of
the net asset value per ordinary share.
REGISTRAR
The entity that manages the Company’s shareholder register.
The Company’s Registrar is Computershare Investor Services
(Guernsey) Limited.
RESERVES
• Share premium account represents the amount by which the
proceeds from the issue of ordinary shares has exceeded the
cost of those ordinary shares. It is not distributable by way of
dividend and cannot be used to fund share repurchases.
• Capital reserve represents realised gains or losses on
investments and derivatives sold, unrealised increases and
decreases in the fair value of investments and derivatives
held and other income and costs recognised in the capital
column of the Statement of Comprehensive Income. It can be
used to fund share repurchases and it is distributable by way
of dividend.
• Revenue reserve represents retained revenue surpluses
recognised through the revenue column of the Statement of
Comprehensive Income. It is distributable by way of dividend.
SECRETARY
FIL Investments International.
SHARE PRICE TOTAL RETURN
Share Price Total Return is a measure showing how the Share
Price has performed over a period of time, taking into account
dividends paid to shareholders. Total Return measures allow
shareholders to compare performance between investment funds
where the dividend paid may differ. To calculate Total Return,
itis assumed that dividends are reinvested into the shares of
the Company at the prevailing Share Price on the last day of the
month that the shares first trade ex-dividend.
SHARE PRICE
The Share Price taken is the closing price. This is the price
at which the Company’s shares trade on the London Stock
Exchange at the end of trading on a business day.
SHORT EXPOSURE
The position of the Company when it has sold a security or
derivative that it does not own but is now committed to eventually
purchase in order to satisfy its obligation to sell. It is a strategy
used to capitalise on an expected decline in the security’s or
derivative’s price.
SIZE OF COMPANY (MARKET CAP)
• Large – above $50bn;
• Medium – between $10bn – $50bn;
• Small – below $10bn
TOTAL ASSETS
Net Assets plus borrowings. The Company does not have any
borrowings.
UNLISTED COMPANIES
Companies not listed on a regulated stock exchange. Theyare
stated at best estimate of fair value, based on recognised
valuation techniques which may take account of recent arm’s
length transactions in the investments.
90
Fidelity Emerging Markets Limited | Annual Report 2026
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