Fidelity Emerging Markets Ltd on Friday said it delivered a negative net asset value return in its latest financial year, but still outperformed its benchmark index despite a cocktail of economic and geopolitical headwinds.

The investment firm, which targets long-term capital growth through exposure to emerging market companies, said its NAV per participating preference share was $8.75 at June 30, unchanged from the same time in 2022.

NAV total return was negative 2.6% for the year ended June 30, while the benchmark MSCI Emerging Markets Total Return index returned negative 2.8%.

Chair Heather Manners said the negative return occurred against ‘a continued difficult global economic and geopolitical backdrop’ and that outperforming the benchmark index was ‘particularly encouraging during a period in which high inflation and tightening monetary policy in the West and disappointing data following China’s hotly anticipated post-Covid reopening have unsettled investors worldwide.’

The investor swung to $16.5 million pretax profit, compared with a $501.5 million loss. Total income increased 15% to $40.6 million from $35.4 million.

Fidelity Emerging also declared a final dividend of 0.19 US cents per share, up from 0.16 cents.

Going forward, Manners said the current financial year ‘may infuse emerging markets with more momentum in terms of performance versus the rest of the world’ thanks to ‘attractive demographics, a burgeoning middle class...and economies that can grow more rapidly than those in the West.’

She added: ‘We believe that your company’s unique approach, top-class management team and cost-efficient structure mean it is in an ideal position to make the most of this improving environment, and we look forward to your portfolio managers employing their full range of investment tools to benefit from it.’

Fidelity Emerging shares were down 0.7% at 587.00 pence in London on Friday afternoon.

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