Fidelity Emerging Markets Ltd - Half-year Report

Fidelity Emerging Markets Limited Half Year Report for the six months ended 31 December 2024 Highlights · During the six months ended 31 December 2024, Fidelity Emerging Markets Limited reported a share price total return of +1.2% and Net Asset Value Return (NAV) of -0.3% · The benchmark index, the MSCI Emerging Markets Index, returned +1.0% over the same period · Stock picking in India in aggregate was the most notable driver of performance over the six months · The short book also contributed positively during the review period and full calendar year · The portfolio remains overweight to the financials, consumer discretionary and consumer staples sectors Financial Highlights 31 December 30 June 2024 2024 Assets USD Gross Asset Exposure1 $1,073.5m $1,177.3m Equity Shareholders' Funds $677.7m $753.4m NAV per Participating Preference $9.77 $10.09 Share2 Gross Gearing2,3 58.4% 56.3% Net Gearing2,4 1.0% 4.3% GBP Gross Asset Exposure1,5 £857.2m £940.7m Equity Shareholders' Funds5 £541.1m £596.0m NAV per Participating Preference £7.80 £7.98 Share2,5 Participating Preference Share Price and Discount Data Participating Preference Share £6.95 £7.03 Price at the period end Discount to NAV per 10.9% 11.9% Participating Preference Share at period end2 Number of Participating 69,334,702 74,646,287 Preference Shares in issue Earning for the six months ended 2024 2023 31 December Revenue Earnings per $0.17 $0.06 Participating Preference Share6 Capital (Loss)/Earnings per ($0.37) $0.23 Participating Preference Share6 Total (Loss)/Earnings per ($0.20) $0.29 Participating Preference Share6 Ongoing charges ratio2 0.84% 0.82% 1The value of the portfolio exposed to market price movements. 2Alternative Performance Measure 3Gross Asset Exposure less Equity Shareholders' Funds expressed as a percentage of Equity Shareholders' Funds. 4Net Market Exposure less Equity Shareholders' Funds expressed as a percentage of Equity Shareholders' Funds. 5The conversion from USD to GBP is based on exchange rates prevailing at the reporting dates. 6Calculated based on weighted average number of participating preference shares in issue during the period. Contacts For further information please contact: George Bayer Company Secretary george.bayer@fil.com FIL Investments International Chairman's Statement I am pleased to present your Company's Half Year Report covering the six months ended 31December 2024. Overview While a great deal has gone on in the world in the period under review, there were three principal events - two of them emanating from the US - that most affected investors in emerging markets during the period. The first was at the start of August, as concerns grew over the likelihood of a US recession. This caused a sharp sell-off in technology stocks globally, with effects felt across emerging as well as developed markets. While the recession fears ebbed with a larger-than-expected interest rate cut from the Federal Reserve in September, the announcement of a stimulus package by the Chinese government the same month had more impact for EM investors, given how long China had remained in the post-Covid doldrums. November saw Donald Trump win the US presidential election, combined with a Republican sweep in both houses of Congress. Given the incoming president's `America first' agenda, the result caused an immediate sell-off in EM stocks as market participants looked ahead to the spectre of renewed trade tariffs. Against this backdrop, net asset value (`NAV') total return performance for the six months ended 31December 2024 was marginally negative, at -0.3%. While this was slightly behind the +1.0% sterling return of the Company's benchmark, the MSCI Emerging Markets Total Return Index (`the Index'), the share price total return per Participating Preference Share again outperformed the Index, rising by 1.2%. The Company now has a three-year track record under the management of the team at Fidelity (appointed with effect from 4October 2021), although both NAV and share price returns over this period are behind the Index, largely owing to a legacy overweight position in Russia in the period leading up to the country's invasion of Ukraine in February 2022. As stated in previous reports, the value of Russian holdings in the portfolio at the time of suspension of international trading in such securities has been written down to zero. However, there was some good news during the period under review as a liquidity opportunity allowed for the disposal of one of the holdings. From 31 March 2022 (just after the invasion) to 31 December 2024, the Company's NAV total return was 7.4% versus an Index return of 6.6%, and we look forward to this outperformance being reflected in our three-year track record - an important yardstick for many investors - in the near future. Furthermore, while the last six months of 2024 saw broadly flat returns, the Company outperformed strongly for the full calendar year, with NAV and share price total returns of 14.7% and 15.4% respectively versus an Index total return of 9.4%. These positive returns speak to the uniqueness of Fidelity's investment process, with its ability to hold short as well as long positions being a key differentiating factor. While the core of the approach is to invest in well financed, well managed businesses that can drive growth, the ability to make money from identifying those at risk of disruption is a great advantage against the current fractured geopolitical backdrop. Both the long and the short book contributed positively to relative performance in Q4 2024 and for the calendar year as a whole, although the impact was negative in the more volatile third quarter of the year. Outlook While at the time of writing, the imposition or increase of US tariffs on cross -border trade is dominating the news agenda, there are reasons to believe that the year ahead may see a continuation of the recovery in emerging markets. As your Portfolio Managers, Nick Price and Chris Tennant, point out in their review of the period, valuations across their investment universe are at multi-decade lows relative to developed markets, and particularly relative to the US. Many EM economies remain robust, having avoided the fiscal excesses of the West in response to the Covid-19 pandemic, with monetary policy headroom and less dollar -denominated debt than has historically been the case, which will be beneficial if the domestic inflationary effects of President Trump's trade tariffs cause US interest rates to remain higher for longer. Meanwhile, there is considerable strength in EM companies' balance sheets, and many are returning capital to shareholders. However, the ramifications of a trade war must not be ignored, particularly in China - by far the largest market in the EM universe - although the impact may be far-reaching across both developed and emerging markets. For this reason, and in a world where seven stocks now make up more than 20% of the entire world stock market, it is more important than ever for investors to be selective. The amount of investors' capital globally that is passively tracking indices has become very high, and as in the US, that leads to a handful of dominant companies and countries, as size becomes its own reward. Homogeneity is not the same as stability, and if investors want to build an `anti-fragile' portfolio, they need to own things that others don't. Emerging markets are a good way to diversify into some stocks that are less correlated with the US S&P 500 Index, which is increasingly prevalent in global investors' portfolios, but differentiation within emerging markets is also important. At 31December 2024, your Company's 10 largest holdings made up 49% of the gross portfolio but only 16% of the index. Combining this active approach with Fidelity's deep research resources and full investment toolkit allowing short as well as long positions, your Board believes the Company remains well placed to achieve its objective of delivering long-term capital growth for shareholders. Discount management During the period under consideration, the Company's discount to NAV narrowed slightly from 11.9% to 10.9%, which is not inconsiderable in an environment of generally widening investment trust discounts. Your Board continues to focus on building awareness of the strength and differentiation of Fidelity's approach, as well as keeping costs in check - at 0.84%, our ongoing charges are the second lowest in our AIC Global Emerging Markets peer group, well below the average of 1.0%. However, we also recognise the importance to investors of taking direct action to limit the discount, and as such we have continued the programme of share buybacks launched in November 2023, repurchasing 5,311,585 shares (c 7.1% of the total at the start of the Half Year) between 1 July and the end of December 2024. Since then, a further 654,576 shares have been bought back, and at the latest practicable date (6March 2025), the discount to NAV stood at 9.9%. As well as having completed a tender offer for 14.99% of the shares in March 2024, I would remind shareholders of the performance conditional tender offer (for up to 25% of shares then in issue) that will take place should the Company's NAV total return fail to exceed the benchmark over the five years ending on 30September 2026. 2024 AGM and final dividend The Company held its Annual General Meeting (`AGM') on 10 December 2024. The other directors and I thank you for your approval of all resolutions presented at the meeting. We particularly appreciate the level of shareholder support and engagement evidenced by more than 39 million shares - a turnout approaching 60% - being voted. Recent news headlines have underlined the importance of shareholder enfranchisement as a key advantage of the investment trust structure, and it is gratifying to see such a high level of engagement even when there is no extraordinary business to beconsidered. At the AGM, shareholders approved the final dividend of $0.20 (15.74p) per Participating Preference Share, a 5.3% increase on the $0.19 (15.27p) paid in respect of FY23. The dividend was paid on 13December 2024. Shareholders should note that the Board will review the final dividend payment for FY25 later in the year based on dividend receipts from the companies held in the portfolio. Heather Manners Chairman 12 March 2025 Portfolio Managers' Half Year Review Macroeconomic Review Emerging markets pulled back in the last six months of 2024 and underperformed developed markets. It was a mixed period for the asset class. Markets globally sold off in early August as concerns about a US recession emerged and the yen carry trade unwound. The backdrop was more supportive for emerging markets over September as the Fed started to ease policy and China announced stimulus measures. The underperformance of emerging markets was largely concentrated in the fourth quarter of the year. Emerging markets retreated in October in advance of the US election and remained under pressure in November and December, as concerns around higher tariffs and a stronger dollar weighed on sentiment, and investors rotated into US equities. Portfolio performance: Six months to 31December 2024 Over the six months ending 31 December 2024, the net asset value (`NAV') total return of Fidelity Emerging Markets Limited was -0.3%, while the share price increased by 1.2%. This was relative to a 1.0% increase for the benchmark index (all figures are stated on a total return basis, in GBP terms). The portfolio's underperformance relative to the index followed a strong first half of the year, which meant the portfolio outperformed the index over the calendar year. While the long book detracted, the short book contributed toperformance. Top five contributors and detractors, six months ending 31 December 2024 Order Security Country Relative Actual (%) CRR (bps) Top 5 1 MakeMyTrip India 5.06 154 2 Headhunter Group Russia 0.00 111 3 Naspers South Africa 6.63 86 4 PPC South Africa 1.51 72 5 Lundin Gold Canada 1.58 59 Bottom 5 1 Kaspi.KZ Kazakhstan 4.77 (127) 2 Inter & Co Brazil 2.10 (109) 3 Alkhorayef Water & Power Technologies Saudi Arabia 2.21 (72) 4 Short Position - name withheld United States (1.03) (58) 5 Axis Bank India 2.63 (58) Source: Fidelity International, 31 December 2024. Underweight exposure to mainland China detracted following stimulus announcement China was the largest driver of underperformance over the period. Positioning was a headwind as the underweight exposure to mainland China detracted after the September stimulus announcement prompted a stock market rally, although the position in Naspers, a holding company for China's Tencent, partly offset this (the portfolio's small overweight exposure to China is achieved through positions in mainland China, Hong Kong, and Naspers). Stock picking in China/Hong Kong was also a headwind as names not held detracted from performance.. The lack of exposure to electric vehicle and smartphone maker Xiaomi hurt performance as it rallied after releasing a new electric vehicle, as did the underweight position in food delivery business Meituan after indications of traction in its revenue per delivery (we initiated a small position in the company towards the end of theyear). Exposure to Brazil and Kazakhstan detracted The exposure to Brazil detracted as concerns about the country's fiscal deficit and rising interest rates weighed on performance. Several of the portfolio's Brazilian financials positions derated, including Inter & Co, the holding company for digital bank Banco Inter. We think that higher rates will have a limited impact on Inter's fundamentals and expect net interest margins will keep expanding and the cost of risk to remain benign given a tight labour market. While the fiscal and interest rate backdrop has deteriorated, the broader macro picture is more positive, with unemployment at decade lows, GDP growth robust, and credit quality positive, creating a relatively strong backdrop for the financials we hold, although we did trim exposure to more rate sensitive names during the period. Positioning in Kazakhstan also detracted. We have a pair trade in Kazakhstan financials, with a long position in Kazakhstan's ecommerce and payments platform Kaspi.KZ and a short position in a Kazakh bank, which plays an important role in reducing the portfolio's country risk. Kaspi.KZ initially sold off after the publication of a short report (to which the company issued a robust rebuttal) and was later impacted by local currency weakness. Fundamentals for Kaspi.KZ remain robust, and the company announced the acquisition of Turkish ecommerce business Hepsiburada later in the year, which should expand its addressable market. The bank that we have a short position in rallied despite continuing to exhibit weak fundamentals, a performance trajectory we expect to reverse over time. Other notable detractors include Indian private bank Axis Bank, which underperformed peers. We shifted some funds from Axis Bank to higher quality peer HDFC Bank over the period. Also weak was Saudi water utility Alkhorayef Water & Power Technologies, which corrected following a period of strong performance after indications of weak execution, prompting us to reduce the position size. Stock picking in India was a key driver ofperformance Stock picking in India in aggregate was the most notable driver of performance. The lead contributor was Indian online travel agent MakeMyTrip. The company has a dominant share of the Indian travel market, and with a market cap of only $13bn, we expect can be 2-3 times the size it is today as it catches up with international peers. MakeMyTrip has a significant growth runway ahead of it over the next decade as the penetration of online travel and hotel spending increases. While valuations are relatively high, they are more reasonable than that of consumer peers in India given its superior growth trajectory. Given the strong share price performance we took profit in the stock at year end. Several short positions in Indian businesses also contributed as overvalued small caps corrected at the end of the year. Materials stocks also supported returns. South African cement producer PPC rallied as the outlook for local construction improved after the election outcome. The company is an attractive self-help story where a new management team with a track record of generating robust margins should drive better execution. The gold price was the driver for other strong performers, Lundin Gold and Pan African Resources, with Lundin continuing to execute exceptionally well and Pan African outperforming the sector given its depressed valuations. Short book contributed to performance The short book contributed to performance. While short positions in China detracted during the rally in September, these stocks gave up almost all their gains in the subsequent months. The period exemplified how our disciplined approach to bet-sizing (where short positions are capped at 100bps) means we do not need to cover shorts at the most painful point. The most successful short was an Asian battery maker suffering from market oversupply that sold off with the local market. It has been pleasing to see a positive contribution from the short book in what has been a relatively challenging period for shorting given the consistent outperformance of crowded shorts. The position in Russian online recruiter Headhunter Group contributed after the position was partly disposed of after the identification of a liquidity opportunity. Portfolio positioning as of 31December 2024 In the portfolio's long book, we look for well capitalised businesses with underlevered balance sheets. Although the long book remains quality focused, a deliberate search for value remains central to our thinking. The ability to venture further down the market cap spectrum also provides exposure to companies benefiting from excellent structural growthdrivers. In aggregate, the long book displays positive style tilts to growth, quality, and value characteristics, and is underweight size, given the midcap bias. When identifying ideas for the short book, we look for companies with a fundamentally negative outlook that also have several red flags around their balance sheets. Regional positioning The exposure to China is highly active. The portfolio is overweight the consumer given this is where policy stimulus is being directed, whether it be trade-in subsidies, rate cuts, or measures designed to stabilise house prices. Consumers also have significant excess savings, which will likely be spent when confidence returns. Positions here are centred around internet businesses such as Tencent (including through a position in Naspers), Alibaba, and PDD, sportswear business Anta Sports, white goods maker Haier Smart Home, and online travel company Trip.com. These companies trade at attractive valuations and most show positive momentum in returning capital to shareholders. Elsewhere in China, we are underweight banks, where stimulus will have a negative effect, given rate cuts and measures that allow borrowers to refinance loans and encourage banks to lend to bankruptdevelopers. Given the derating in China, the focus has been on increasing the quality of holdings, adding for example positions in companies like leading battery maker CATL, digital truck broker Full Truck Alliance, and auto glass maker Fuyao Glass, which benefit from strong moats in their respective industries. We also have several short positions in the market, for example in bankrupt property developers, or indebted producers of commodities in oversupply. We see opportunities in the rest of Asia, too. Despite some recent cyclical headwinds, India remains a long-term structural growth story. Exposure to the Indian market is predominantly via financials, which trade on more attractive valuations than the broader market, and we hold leading private banks HDFC and ICICI, as well as SME lender Five Star Business Finance. We also have select exposure to the consumer through online travel business MakeMyTrip and motorcycle business Eicher Motors. We hold short positions in India, for example in businesses suffering from deteriorating market structures but trading at extended valuations. Elsewhere in Asia, there is exposure to ASEAN through Indonesia, where we hold consumer and financials names, and frontier market Vietnam, where the main exposure is to IT services business FPT, which benefits from a higher skilled workforce and lower costs thanpeers. While the portfolio has an underweight exposure to South Korea and Taiwan, we have core positions in semiconductor and memory names. The focus here has been diversifying the exposure beyond index heavyweight TSMC and adding smaller positions in Artificial Intelligence (AI) beneficiaries such as Elite Material, which has a dominant position in the copper-clad laminate used in the server industry, and ASIC design house Alchip, which should benefit from increased investment in custom silicon. We see ample opportunities to take out short positions in technology stocks that have rallied on excitement around AI despite having little tangible revenue exposure to the theme. We also hold short positions in Asian battery makers suffering from oversupply. The exposure to Latin America has been carefully managed. A widening fiscal deficit and rising interest rates in Brazil are a headwind but we still see opportunities to generate alpha in the market. High conviction positions include fintechs like Nu Bank and Inter & Co and the bank BTG Pactual which is shifting its business from more volatile areas like sales and trading to wealth and asset management, and which we expect to generate robust returns on equity even in a weaker macro backdrop. In Mexico the market has also derated, largely down to political volatility both north and south of the border. Here we have limited exposure to domestic names that are at risk of a weaker currency and tariffs. Positions include Grupo Mexico, the holding company for high quality, low-cost copper producer Southern Copper, and tortilla maker Gruma, which is relatively insulated from any increase in tariffs given its localised production bases in the US. In EMEA, South Africa is enjoying an improving economic backdrop and a market -friendly election outcome. The largest exposure is to Naspers, but we also hold financials like direct-to-consumer insurer Outsurance Group, which is replicating the success it has had locally in Australia, as well as FMCG business Tiger Brands, which is an attractive turnaround story. Turkey is a relatively new area of focus following its return to monetary orthodoxy, positions here include airport operator Tav and hard discount retailer Bim. Our work on scoping out the opportunity set in the Turkish market is ongoing and we carried out a successful research trip to the country earlier this year. Central and eastern Europe continues to offer up interest value opportunities in the financials space - here we hold Greece's Piraeus Financial and Hungary's OTP Bank. We continue to explore opportunities in the Middle East market while remaining cognisant of valuations and liquidity. Recent additions include Emaar Development, a UAE property developer benefiting from higher expat demand, and which offers an attractive dividend yield. Given high retail ownership and extended valuations there are ample opportunities for shorting in the market. Sector positioning At a sector level, the portfolio's largest overweight exposure is to consumer companies. The consumer discretionary exposure is predominantly through China names, including internet, sportwear, white goods, and online travel companies. Here the focus is on companies that will benefit from a recovery in consumer confidence, and which are returning capital to shareholders. Beyond China, our exposure includes staples businesses in South Africa and Mexico. There are also several short positions in companies across markets that are exposed to competitive threats or operate in deteriorating market structures, including retailers and electric vehicle makers. Financials remains another significant overweight. The exposure is not overly geared to any one interest-rate scenario given uncertainty surrounding the inflation outlook. The financials exposure can broadly be broken into three buckets. The first is to fintechs in Kazakhstan and Brazil which are growing their customer bases and taking market share. The second is to structural growth stories such as Indian private banks, which benefit from the same demographic drivers as consumer companies, but without the lofty valuations. And finally, we see many value opportunities, particularly in central and eastern European markets such as Hungary, Georgia, andGreece. Our positioning in the commodities space is selective. The majority of the exposure is to copper, where we see attractive supply-demand drivers over the medium term given the tailwind of electrification and a constrained supply backdrop. While the copper price has been weaker recently, this has largely been sentiment driven and fundamentals remain attractive. We also have exposure to gold, which should benefit as central banks shift their FX reserves into the precious metal. Again, there are ample opportunities to take short positions in this market, and the long positions in gold miners are paired with short positions in structurally challenged peers. We also have short positions in iron ore miners, which will continue to grapple with structurally weak demand from China. We have a bearish outlook for oil given the market is reasonably well supplied and demand remains weak, particularly in China, and there is limited exposure to oil in the portfolio. Outlook Emerging markets are well placed The backdrop for global inflation and interest rates is fundamental to the outlook for emerging markets. There are signs of a very strong US economy which may well sustain the dollar strength we experienced in 2024. An increase in tariffs will likely be inflationary, although the response from China and others will be key, with an RMB devaluation an offsetting deflationary force, for example. There are other factors at play, too. Artificial intelligence may start playing a deflationary role, while any resolution of the Ukraine war could see energy prices fall. Emerging markets are in general far better placed to deal with these higher rates than Europe given the broadly better fiscal backdrop. Given that rates should remain more elevated than recent history, we continue to think that some form of value exposure (without compromising on quality) has a role to play in actively managedportfolios. China is key China is an important part of the puzzle. The extent to which we will see a rebound in 2025 or further malaise is not clear. We are watching closely the enduring impact of a property bubble and signs of price stabilisation. Return of capital while patchy is improving, but we have lower visibility of cashflows than in developed markets. In addition, many industries in China have a deluge of overcapacity. Bond yields in China have collapsed as domestic investors put money in the bond market, and while this has yet to feed into negative performance for banks, this sector faces net-interest margin compression and, at some point, a very negative credit cycle. We have started to see developments around tariffs and are closely watching China's reaction, including the potential for further stimulus or currency devaluation. An escalation of geopolitical tensions is also possible. Real-world impact of AI is being closely monitored Elsewhere, dispersion is very broad, which offers the potential to unlock attractive shareholder returns. In Latin America, the market has derated significantly, obscuring the fact there are many attractive companies that are relatively insulated from higher interest rates and trade tensions, while the EMEA region is home to some interesting value opportunities among financials and consumer stocks. Looking to Asia, we expect that demand for chip makers and memory plays in Taiwan and Korea will remain robust given the AI arms race is a battle no-one can afford to lose. We are closely watching too the potential real -world impact of AI, as technological progress drives innovation and creates opportunities for consumers of AI but also has the potential to render obsolete or severely impair existing business models. Utilise full toolkit to reduce risk Although the emerging market universe is trading at multi-decade lows relative to developed markets, bouts of stronger performance can result in rapid re -rating, underlining the importance of active management and disciplined position sizing. Against an uncertain backdrop we take a prudent approach to managing country exposures and make use of the full toolkit in the investment company, using, for example, pair trades and index positions to reduce country risk. In the long book there is a continued emphasis on owning well capitalised businesses that are returning capital to shareholders - quality characteristics that should offer support in what will likely remain a more volatile backdrop. Nick Price Chris Tennant Portfolio Managers 12 March 2025 Spotlight on the Top 5 Holdings as at 31 December 2024 The top five holdings comprise 33.2% of the Company's Net Assets. Taiwan Semiconductor Manufacturing Industry:Information Technology Country:Taiwan % of Net Assets10.8% TSMC is a pre-eminent Taiwanese semiconductor foundry with leading-edge technology, which reinforces the company's competitive position and ability to generate incremental return on invested capital. The company has built a technological moat over the past three decades and occupies an especially dominant position at the forefront of the industry as competitors have dropped from the race due to technical hurdles and the barrier of high required capital expenditures. TSMC's ability to hire the best talent while continuously improving its know-how keeps it ahead of the competition and able to generate cashflow to feed back into investing in R&D and capacity. Naspers Industry:Financials Country:India % of Net Assets7.8% Naspers is a global internet and entertainment group and one of the world's largest technology investors. It is a South African holding company specialising in internet investments and operates in more than 120 countries and markets with long-term growth potential. It runs some of the world's leading internet, video entertainment, and media platforms. The company owns a sizeable stake in Tencent, the Chinese multinational technology and entertainment conglomerate. Naspers operates in various sectors, including online classifieds, food delivery, payments, travel, education, health, and social and internet platforms. MakeMyTrip Industry:Consumer Discretionary Country:India % of Net Assets5.9% MakeMyTrip is the largest online travel agency in India. The company has a leading share in air ticketing and dominant market share in bus ticketing. It also has a strong and growing presence in hotels. The company has a long growth runaway given low penetration of airlines and hotels in India along with improving air connectivity and infrastructure. The company is benefiting from rising income levels and increasing internet penetration in the country. Trip.com's ownership and board presence are likely to give further impetus to international growth, improve strategic decision making and the competitive position of the company. HDFC Bank Industry:Financials Country:India % of Net Assets4.5% HDFC Bank is the best run bank in India with a focus on non-mortgage retail lending. It has an excellent history of balancing growth and shareholder returns. Its conservative capital management practices enable it to continually invest across the cycle. Its leading-edge technology reinforces its competitive position and ability to generate incremental returns on invested capital. Kaspi.KZ Industry:Financials Country:Kazakhstan % of Net Assets4.2% Kaspi.KZ is the dominant consumer finance, e-commerce, and payments platform in Kazakhstan. It provides interconnected technology and products and services that help people to pay, shop, and manage their finances. Its ecosystem connects consumers and merchants, enabling digital payments, e-commerce, and financial services. The company's gateway to its ecosystem is the mobile app, which is powered by the company's proprietary technology and enables users to navigate between interconnected products and services. Kaspi.KZ serves customers in Kazakhstan and Azerbaijan. Twenty Largest Investments as at 31 December 2024 The Asset Exposures shown below measure the exposure of the Company's portfolio to market price movements in the shares and equity linked notes owned or in the shares underlying the derivative instruments. The Fair Value is the value the portfolio could be sold for and is the value shown on the Statement of Financial Position. Where a contract for difference ("CFD") is held, 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 shares has moved (in effect, the unrealised gain or loss on the exposed positions). Where the Company only holds shares, the Fair Value and Asset Exposure will be the same. Asset Exposure Fair value Long Exposures - shares unless $'000 %1 $'000 otherwise stated Taiwan Semiconductor 73,486 10.8 61,500 Manufacturing (shares, options andlong CFD) Information Technology Naspers (shares and long CFD) 52,881 7.8 44,704 Consumer Discretionary MakeMyTrip (option and long CFD) 40,145 5.9 (768) Consumer Discretionary HDFC (shares and long CFD) 30,760 4.5 24,421 Financials Kaspi.KZ 28,608 4.2 28,608 Financials ICICI (shares and long CFD) 25,821 3.8 2,826 Financials Groupo Mexico (long CFD) 20,219 3.0 (446) Materials Samsung Electronics (option and 20,161 3.0 (423) long CFD) Information Technology Piraeus Financial Holdings 20,009 3.0 20,009 Financials Five-Star Business Finance 18,663 2.8 18,663 Financials Bank Central Asia 18,202 2.7 18,202 Financials TBC Bank Group (long CFD) 16,283 2.4 (8) Financials FPT 15,145 2.2 15,145 Information Technology ANTA Sports Products (option and 14,395 2.1 (977) long CFD) Consumer Discretionary Trip.com Group 14,375 2.1 (683) Consumer Discretionary Inter 14,168 2.1 14,168 Financials Nu Holdings (option and long 13,897 2.1 (687) CFD) Financials PPC 13,863 2.0 13,863 Materials Tencent (option and long CFD) 13,548 2.0 (106) Communication Services Auto Partner 13,298 2.0 13,298 Consumer Discretionary Twenty largest long exposures 477,927 70.5 271,309 Other long exposures 517,508 76.4 350,823 Total long exposures before long 995,435 146.9 622,132 futures and hedges Add: long future contracts Hang Seng China Enterprises 23,611 3.5 209 Index Total long futures contracts 23,611 3.5 209 Less: hedging exposures MSCI Emerging Markets Index (140,077) (20.7) 5,233 (future) Total hedging exposures (140,077) (20.7) 5,233 Total long exposures after the 878,969 129.7 627,574 netting of hedges Add: short exposures Short CFDs (58 holdings) 159,307 23.5 1,954 Short futures (12 holdings) 31,800 4.7 1,465 Short options (2 holdings) 3,447 0.5 713 Total short exposures 194,554 28.7 4,132 Gross Asset Exposure2 1,073,523 158.4 Forward currency contracts 629 Portfolio Fair Value3 632,335 Net current assets (excluding 45,331 derivative assets andliability ies) Total Net Assets 677,666 1Asset Exposure expressed as a percentage of Net Assets. 2Gross Asset Exposure comprises market exposure to investments of $632,011,000 plus market exposure to derivative instruments of $441,512,000. 3Portfolio Fair Value comprises investments of $632,011,000 plus derivative assets of $13,984,000 less derivative liabilities of $13,660,000 (per the Statement of Financial Position below). Interim Management Report Principal and Emerging Risks and Uncertainties, Risk Management In accordance with the AIC Code, the Board has in place a robust process for identifying, evaluating and managing the principal risks and uncertainties faced by the Company, including those that could threaten its business model, future performance, solvency or liquidity. The Board, with the assistance of the Manager, has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key existing and emerging risks and uncertainties faced by the Company. The list of risks includes: volatility of emerging markets and market risk; investment performance risk; changing investor sentiment; cybercrime and information security risk; level of discount to net asset value risk; lack of market liquidity risk; business continuity and event management risk; gearing risk; foreign currency exposure risk; environmental, social and governance (ESG) risk and key person risk. Full details of these risks and how they are managed are set out on pages 22 to 24 of the Company's Annual Report for the year ended 30 June 2024 which isavailable on the Company's website at www.fidelity.co.uk/emergingmarkets. The Audit and Risk Committee continues to identify new emerging risks and take any necessary 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 considered by the Audit and Risk Committee. The Board determines the nature and extent of any risks it is willing to take in order to achieve its strategic objectives. The Manager also has responsibility for risk management for the Company. It works with the Board to identify and manage the principal and emerging risks and uncertainties and to ensure that the Board can continue to meet its Corporate Governance obligations. Key emerging issues that the Board has identified include; rising geopolitical tensions, including contagion of the Ukraine crisis or tensions between China and Taiwan into the wider region or an increase in tensions in the South China Sea; rising inflation and the so-called cost of living crisis impacting demand for UK-listed shares; and climate change, which is one of the most critical emerging issues confronting asset managers and their investors. Macro and ESG considerations, including climate change have been included into the Company's investment process. The Board continues to monitor these issues. The Board seeks to ensure high standards of business conduct are adhered to by all of the Company's service providers and that agreed service levels are met. The Board is responsible for promoting the long-term success of the Company for the benefit of all stakeholders and in particular its shareholders. Although the majority of the day-to-day activities of the Company are delegated to the Manager, the Investment Manager, and other third-party service providers, the responsibilities of the Board are set out in the schedule of matters reserved for the Board and the relevant terms of reference of its committees, all of which are reviewed regularly by the Board. Transactions with the Alternative Investment Fund Manager and Related Parties The Alternative Investment Fund Manager ("AIFM") has delegated the Company's investment management to FIL Investments International. Transactions with the AIFM and related party transactions with the Directors are disclosed in Note 12. Going Concern In accordance with provision 35 of the 2019 AIC Code of Corporate Governance, the Directors have assessed the prospects of the Company over a longer period than the twelve month period required by the "Going Concern" basis. The Company is an investment fund with the objective of achieving long-term capital growth by investing in emerging markets. The Board considers long-term to be at least five years, and accordingly, the Directors believe that five years is an appropriate investment horizon to assess the viability of the Company, although the life of the Company is not intended to be limited to this or any other period. The Directors have considered the Company's investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio and its expenditure and cash flow projections. In preparing the Financial Statements, the Directors have measured the impacts of the war in Ukraine and how the conflict has increased the risk for business continuity as well as the impact of climate change risks. The Board has considered the impact of regulatory changes and how this may affect the Company. The Board has also assessed the ongoing risks posed on the Company by continued evolving variants of COVID such as liquidity risks to markets, risks associated with the maintenance of the current dividend policy and business continuity risks for the Company's key service providers. The Board continues to review emerging risks that could have a potential impact on the operational capability of the Investment Manager and the Company's other key service providers. During the year under review, the Board received updates from Fidelity and other key service providers confirming that they continued to service the Company in line with service level agreements and have suitable and robust business continuity arrangements in place. The Directors, having considered the liquidity of the Company's portfolio of investments (being mainly securities which are readily realisable) and the projected income and expenditure, are satisfied that the Company is financially sound and has adequate resources to meet all of its liabilities and ongoing expenses and can continue in operational existence for a period of at least twelve months from the date of this Half Year Report. Accordingly, the Financial Statements of the Company have been prepared on a going concern basis. Responsibility Statement In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules, the Directors confirm that to the best of their knowledge: ·the condensed set of financial statements contained within the Half Year Report has been prepared in accordance with IAS 34 `Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and return of the Company; ·the Half Year Report includes a fair review of the development and performance of the Company and important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements; ·the Half Year Report includes a description of the principal risk and uncertainties for the remaining six months of the financial year; and ·the Half Year Report includes a fair review of the information concerning related party transactions. The Half Year Report has not been audited or reviewed by the Company's Independent Auditor. For and on behalf of the Board Heather Manners Chairman 12 March 2025 Statement of Comprehensive Income for the six months ended 31 December 2024 Six Year Six months ended 30 months ended 31 June ended 31 December 2024 December 2024 2023 audited unaudited unaudited Note Revenue Capital Total Revenue Capital Total Revenue Capital Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Revenue Investment 4 10,127 - 10,127 19,284 - 19,284 9,449 - 9,449 income Derivative 4 15,830 - 15,830 19,711 - 19,711 7,656 - 7,656 income Other income 4 361 - 361 1,252 - 1,252 596 - 596 Total Income 26,318 - 26,318 40,247 - 40,247 17,701 - 17,701 Net - (9,533) (9,533) - 81,553 81,553 - 39,483 39,483 (losses)/gains on investments at fairvalue through profit or loss Net - (14,304) (14,304) - 35,890 35,890 - (15,667) (15,667) (losses)/gains on derivative instruments Net foreign - (1,108) (1,108) - (1,569) (1,569) - (522) (522) exchange losses Total income 26,318 (24,945) 1,373 40,247 115,874 156,121 17,701 23,294 40,995 and gains/(losses) Expenses Management 5 (447) (1,789) (2,236) (935) (3,741) (4,676) (469) (1,875) (2,344) fees Other (828) - (828) (1,631) - (1,631) (860) - (860) expenses Profit/(loss) 25,043 (26,734) (1,691) 37,681 112,133 149,814 16,372 21,419 37,791 before finance costs andtaxation Finance costs 6 (11,672) - (11,672) (21,566) - (21,566) (10,201) - (10,201) Profit/(loss) 13,371 (26,734) (13,363) 16,115 112,133 128,248 6,171 21,419 27,590 before taxation Taxation (1,095) 289 (806) (2,060) (123) (2,183) (1,022) (270) (1,292) Profit/(loss) 12,276 (26,445) (14,169) 14,055 112,010 126,065 5,149 21,149 26,298 after taxation for the period attributable to Participating Preference Shares Earnings/(loss 7 $0.17 ($0.37) ($0.20) $0.16 $1.29 $1.45 $0.06 $0.23 $0.29 ) per Participating Preference Share (basic and diluted) The total column of this statement represents the Company's Statement of Other 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. The Company does not have any other comprehensive income. Accordingly the profit/(loss) after taxation for the period is also the total comprehensive income for the period. All the profit/(loss) and total comprehensive income is attributable to the equity shareholders of the Company. There are no minority interests. No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations. Statement of Changes in Equity for the six months ended 31 December 2024 Note Share Capital Revenue Total premium reserve reserve equity account $'000 $'000 $'000 $'000 Six months ended 31 December 2024 (unaudited) Total equity at 30 June 2024 6,291 695,822 51,333 753,446 (Loss)/profit after taxation - (26,445) 12,276 (14,169) for the period Participating Preference 9 - (47,508) - (47,508) Shares repurchased into Treasury Dividend paid to 8 - - (14,103) (14,103) shareholders Total equity at 31 December 6,291 621,869 49,506 677,666 2024 Year ended 30 June 2024 (audited) Total equity at 30 June 2023 6,291 735,860 54,583 796,734 Profit after taxation for - 112,010 14,055 126,065 the year Repurchase and cancellation 9 - (127,125) - (127,125) of the Company's own shares Participating Preference 9 - (24,923) - (24,923) Shares repurchased into Treasury Dividend paid to 8 - - (17,305) (17,305) shareholders Total equity at 30 June 2024 6,291 695,822 51,333 753,446 Six months ended 31 December 2023 (unaudited) Total equity at 30 June 2023 6,291 735,860 54,583 796,734 Profit after taxation for - 21,149 5,149 26,298 the period Participating Preference 9 - (4,827) - (4,827) Shares repurchased into Treasury Dividend paid to 8 - - (17,305) (17,305) shareholders Total equity at 31 December 6,291 752,182 42,427 800,900 2023 Statement of Financial Position as at 31 December 2024 Note 31 December 30 June 31 December 2024 2024 2023 unaudited audited unaudited $'000 $'000 $'000 Non-current assets Financial assets at fair 10 632,011 696,753 768,579 value through profit and loss Current assets Derivative assets 10 13,984 25,399 12,766 Amounts held at futures 44,876 44,952 28,400 clearing houses and brokers Other receivables 2,007 8,083 1,989 Cash at bank 1,751 8,794 16,435 62,618 87,228 59,590 Current liabilities Derivative liabilities 10 13,660 11,857 21,013 Other payables 3,303 18,678 6,256 16,963 30,535 27,269 Net current assets 45,655 56,693 32,321 Net assets 677,666 753,446 800,900 Equity Share premium account 6,291 6,291 6,291 Capital reserve 621,869 695,822 752,182 Revenue reserve 49,506 51,333 42,427 Total Equity Shareholders' 677,666 753,446 800,900 Funds Net asset value per 11 $9.77 $10.09 $8.85 Particpating Preference Share Statement of Cash Flows for the six months ended 31 December 2024 Six months Year Six months ended ended ended 31 December 30 June 31 December 2024 2024 2023 unaudited audited unaudited $'000 $'000 $'000 Operating activities Cash inflow from investment income 11,060 24,168 13,179 Cash inflow from derivative income 11,719 9,769 3,890 Cash inflow from other income - 20 20 Cash outflow from taxation paid (1,096) (2,060) (1,022) Cash outflow from the purchase of (372,144) (695,450) (242,310) investments Cash inflow from the sale of investments 417,342 854,047 276,557 Cash outflow from net proceeds from 5,809 23,436 (5,742) settlement of derivatives Cash outflow from amounts held at 76 (26,742) (10,190) futures clearing houses and brokers Cash outflow from operating expenses (3,194) (6,217) (3,231) Net cash inflow from operating 69,572 180,971 31,151 activities Financing activities Cash outflow from CFD interest paid (10,675) (18,527) (8,599) Cash outflow from short CFD dividends (1,280) (2,726) (1,539) paid Cash outflow from dividends paid to (14,103) (17,305) (17,305) shareholders Cash outflow from repurchase of (49,449) (22,982) (4,808) participating preferenceshares into treasury Cash outflow from repurchase and - (127,125) - cancellation of Participating Preference Shares Net cash outflow from financing (75,507) (188,665) (32,251) activities Net decrease in cash at bank (5,935) (7,694) (1,100) Cash at bank at the start of the period 8,794 18,057 18,057 Effect of foreign exchange movements (1,108) (1,569) (522) Cash at bank at the end of the period 1,751 8,794 16,435 Notes to the Financial Statements for the six months ended 31 December 2024 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. 2. Publication of Non-statutory Accounts The financial statements in this Half Year Report have not been audited by the Company's Independent Auditor. The financial information for the year ended 30 June 2024 is extracted from the latest published annual report of the Company which was delivered to the Guernsey Financial Services Commission. 3. Accounting Policies (i) Basis of Preparation The interim financial statements for the six months ended 31 December 2024 have been prepared in accordance with International Accounting Standard 34, `Interim Financial Reporting'. The interim financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2024, which 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. (ii) Going Concern The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements. In making their assessment the Directors have reviewed the income and expense projections, the liquidity of the investment portfolio, stress testing performed and considered the Company's ability to meet liabilities as they fall due. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements. 4. Income Six months Year ended Six months ended 30 June ended 31 December 2024 31 December 2024 audited 2023 unaudited $'000 unaudited $'000 $'000 Investment income UK dividends 367 362 325 Overseas dividends 9,758 18,900 9,109 UK and overseas scrip - 15 15 dividends Interest on bonds 2 7 - 10,127 19,284 9,449 Derivative income Dividends received on long 9,504 8,489 2,325 CFDs Interest received on CFDs 740 2,114 1,014 Option Income 5,586 9,108 4,317 15,830 19,711 7,656 Other income Interest income from cash and 361 1,232 576 cash equivalents and collateral Fee rebate - 20 20 361 1,252 596 Total income 26,318 40,247 17,701 5. Management Fees Revenue Capital Total $'000 $'000 $'000 Six months ended 31 December 2024 (unaudited) Management fees 447 1,789 2,236 Year ended 30 June 2024 (audited) Management fees 935 3,741 4,676 Six months ended 31 December 2023 (unaudited) Management fees 469 1,875 2,344 Under the Investment Management Agreement (`IMA'), Fidelity International is entitled to receive a Management Fee of 0.60% per annum of the Net Asset Value of the Company. Fees will be payable monthly in arrears and calculated on a daily basis. Management fees incurred by collective investment schemes or investment companies managed or advised by the Investment Manager are reimbursed. 6. Finance Costs Revenue Capital Total $'000 $'000 $'000 Six months ended 31 December 2024 (unaudited) Dividends paid on short CFDs 975 - 975 Interest paid on CFDs 10,697 - 10,697 11,672 - 11,672 Year ended 30 June 2024 (audited) Dividends paid on short CFDs 3,081 - 3,081 Interest paid on CFDs 18,485 - 18,485 21,566 - 21,566 Six months ended 31 December 2023 (unaudited) Dividends paid on short CFDs 1,517 - 1,517 Interest paid on CFDs 8,684 - 8,684 10,201 - 10,201 7. Earnings/(Loss) per Participating Preference Share Six months Year ended Six months ended 30 June ended 31 December 2024 31 December 2024 audited 2023 unaudited unaudited Revenue earnings per Participating $0.17 $0.16 $0.06 PreferenceShare Capital (loss)/earnings per ($0.37) $1.29 $0.23 Participating Preference Share Total (loss)/earnings per ($0.20) $1.45 $0.29 Participating Preference Share - basic and diluted The earnings/(loss) per Participating Preference Share is based on the profit/(loss) after taxation for the period divided by the weighted average number of Participating Preference Shares in issue during the period, as shown below: Six Year Six months ended months ended 30 June ended 31 2024 31 December December audited 2024 2023 $'000 unaudited unaudited $'000 $'000 Revenue profit after taxation for the period 12,276 14,055 5,149 Capital (loss)/profit after taxation for the (26,445) 112,010 21,149 period Total (loss)/profit after taxation for the (14,169) 126,065 26,298 period attributable to Participating PreferenceShares Number Number Number Weighted average number of 71,877,832 86,936,701 90,985,735 Participating Preference Shares in issue 8. Dividend Paid to Shareholders Six Year ended Six months months 30 June ended ended 2024 31 December 31 December audited 2023 2024 $'000 unaudited Unaudited $'000 $'000 Dividend Paid Dividend of 20 cents pence per ordinary 14,103 - - share paid for the year ended 30 June 2024 Dividend of 19 cents pence per ordinary - 17,305 17,305 share paid for the year ended 30 June 2023 No dividend has been declared in respect of the six months ended 31 December 2024 (six months ended 31 December 2023: none). 9. Share Capital 31 December 30 June 31 December 2024 2024 2023 Number of Number of Number of shares shares shares Authorised Founder shares of no par value 1,000 1,000 1,000 Issued Participating Preference Shares held outside Treasury Beginning of the year 74,646,287 91,100,066 91,100,066 Repurchase and cancellation of the - (13,531,881) - Company's own Participating Preference Shares Participating Preference Shares (5,311,585) (2,921,898) (637,175) repurchased intoTreasury End of the period 69,334,702 74,646,287 90,462,891 Participating Preference Shares held inTreasury* Beginning of the period 2,921,898 - - Participating Preference Shares 5,311,585 2,921,898 637,175 repurchased intoTreasury End of the period 8,233,483 2,921,898 637,175 Total Participating Preference Shares 77,568,185 77,568,185 91,100,066 *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 Board of Directors is mindful that the Company's shares have traded at a discount to NAV for some time, and frequently deliberates appropriate discount control mechanisms to address the imbalance between the demand and supply of the Company's shares. The Board intends to continue using its buyback programme to address the discount to NAV with the ambition that it may ultimately be maintained in single digits in normal market conditions on a sustainable basis. The costs associated with the repurchase of the shares of $47,508,000 were charged to the capital reserve for the year ended 31 December 2024. The Company may issue an unlimited number of Shares of no par value. Founder Shares All of the Founder Shares were issued on 6 June 1989. The Founder Shares were issued at $1 each par value. The Founder Shares are not redeemable. At the Extraordinary General Meeting of the Company on 30October 2009 and in accordance with The Companies (Guernsey) Law, 2008 it was approved that each Founder Share be redesignated as no par value shares. The Founder Shares confer no rights upon holders other than at general meetings, on a poll, every holder is entitled to one vote in respect of each Founder Share held. 10. Fair Value Hierarchy The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values. +--------------+---------------------------------------------------------------+ |Classification|Input | +--------------+---------------------------------------------------------------+ |Level 1 |Valued using quoted prices in active markets for identical | | |assets | +--------------+---------------------------------------------------------------+ |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 table below sets out the Company's fair value hierarchy: 31 December 2024 (unaudited) Level 1 Level 2 Level 3 Total $'000 $'000 $'000 $'000 Financial assets at fair value through profit or loss Investments in equity 621,157 - - 621,157 securities Equity linked notes - 6,377 - 6,377 Investee funds - - 4,477 4,477 Derivative instrument assets 7,257 - - 7,257 - Futures contracts Derivative instrument assets 1,178 90 - 1,268 - Options Derivative instrument assets - 4,830 - 4,830 - CFDs Derivative instrument assets - 629 - 629 - forward currency contract 629,592 11,926 4,477 645,995 Financial liabilities at fair value through profit or loss Derivative instrument 351 - - 351 liabilities - Futures contracts Derivative instrument 1,262 448 - 1,710 liabilities - Options Derivative instrument - 11,599 - 11,599 liabilities - CFDs 1,613 12,047 - 13,660 30 June 2024 (audited) Level 1 Level 2 Level 3 Total $'000 $'000 $'000 $'000 Financial assets at fair value through profit or loss Investments in equity 686,519 - 506 687,025 securities Equity linked notes - 4,555 - 4,555 Debt instruments - 316 - 316 Investee funds - - 4,857 4,857 Derivative instrument assets 268 - - 268 - Futures contracts Derivative instrument assets 6,412 11 - 6,423 - Options Derivative instrument assets - 18,344 - 18,344 - CFDs Derivative instrument assets - 364 - 364 - forward currency contracts 693,199 23,590 5,363 722,152 Financial liabilities at fair value through profit or loss Derivative instrument 1,889 - - 1,889 liabilities - Futures contracts Derivative instrument 1,198 2,007 - 3,205 liabilities - Options Derivative instrument - 6,763 - 6,763 liabilities - CFDs 3,087 8,770 - 11,857 31 December 2023 (unaudited) Level 1 Level 2 Level 3 Total $'000 $'000 $'000 $'000 Financial assets at fair value through profit or loss Investments in equity 760,349 - 810 761,159 securities Equity linked notes - 2,334 - 2,334 Investee funds - - 5,086 5,086 Derivative instrument assets 429 - - 429 - Futures contracts Derivative instrument assets - 12,337 - 12,337 - CFDs 760,778 14,671 5,896 781,345 Financial liabilities at fair value through profit or loss Derivative instrument 6,791 - - 6,791 liabilities - Futures contracts Derivative instrument 200 42 - 242 liabilities - Options Derivative instrument - 13,980 - 13,980 liabilities - CFDs 6,991 14,022 - 21,013 As the key input into the valuation of Level 3 investments is official valuation statements from the Investee Fund, 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 of this report. The following table summarises the change in value associated with Level 3 financial instruments carried at fair value for the six months ended 31 December 2024, year ended 30 June 2024 and for the six months ended 31 December 2023: 31December 30June 31December 2024 2024 2023 $'000 $'000 $'000 Opening balance 5,363 6,115 6,115 Sales (1,057) (8,384) (4,178) Realised losses (9,105) (19,431) (8,900) Net change in unrealised gains 9,276 27,063 12,859 Closing balance 4,477 5,363 5,896 The Company's holdings in Russian securities have been fair valued at nil as at 31 December 2024 (year ended 30 June 2024: nil, six month ended 31 December 2023: nil) as a result of trading being suspended on international stock exchanges. These Russian securities have a carrying cost of $90,932,976 as at 30 June 2024 (year ended 30 June 2024: $90,932,976, six month ended 31December 2023: $90,932,976). The Company's policy is to recognise transfers in and transfers out at the end of each accounting year. 11. Net Asset Value per Participating Preference Share 31December 30June 31December 2024 2024 2023 unaudited audited unaudited Net assets $677,666,000 $753,446,000 $800,900,000 Participating Preference 69,334,702 74,646,287 90,462,891 Shares in issue Net Asset Value per $9.77 $10.09 $8.85 Participating Preference Share 12. Transactions with the Manager and Related Parties FIL Investment Services (UK) Limited is the Company's Alternative Investment Fund Manager and has delegated portfolio management to FIL Investment Management International. Both companies are Fidelity group companies. Details of the current fee arrangements are given in Note 5 above. During the period, management fees of $2,236,000 (year ended 30 June 2024: $4,676,000 and six months ended 31 December 2023: $2,344,000) were payable to the Manager. Amounts payable at the reporting date are included in other payables. At the date of this report, the Board consisted of five non-executive Directors all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. From 1 July 2024, the Chairman receives an annual fee of £52,000 (until 30 June 2024: £50,000), theChairman of the Audit Committee and Senior Independent Director receive an annual fee of £39,500 (until 30 June 2024: £38,000) and the other Directors receive an annual fee of £37,500 (until 30 June 2024:£36,000). The Directors received for the last financial years fees totalling £205,829 (2023:£221,115). The following members of the Board hold Participating Preference Shares in the Company at the date of this report: Heather Manners 10,000 shares, Torsten Koster 15,000 shares, Dr Simon Colson 4,416 shares, Katherine Tsang 8,000 shares and Mark Little 2,850 shares. The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 31 December 2024 and 31 December 2023 has not been audited or reviewed by the Company's Independent Auditor. The information for the year ended 30 June 2024 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies, unless otherwise stated. The report of the Auditor on those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement. A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/emergingmarkets where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found. END This information was brought to you by Cision http://news.cision.com https://news.cision.com/fidelity-emerging-markets-ltd/r/half-year-report,c4118261

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