| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.6% | 3.8% | 32.0% |
| 2025 |
|---|
| 32.0% |
The abrdn Emerging Markets Fund gained 4.59% in Q4 2025, slightly lagging the benchmark by 18 basis points but delivering strong full-year returns of 32.02%. The portfolio benefited from the AI-driven technology rally, particularly in Taiwan and South Korea, where semiconductor companies like Taiwan Semiconductor, SK Hynix, and Samsung Electronics outperformed on memory chip shortages and rising AI infrastructure demand. South Korea's Value-up program also supported returns. Indonesia recovered on easing policy concerns, while copper miner Grupo Mexico rallied on electrification and data center growth. However, China and Hong Kong detracted as markets sold off amid softer growth and underwhelming government response, hurting consumer-focused holdings like Alibaba and Tencent. Looking ahead, the managers remain constructive on emerging markets, supported by a weaker dollar, lower rates, and broad capex themes including AI, electrification, and supply chain shifts. They acknowledge geopolitical risks from Trump's policies and potential trade tensions but believe valuations remain attractive while maintaining their focus on quality investments.
Emerging markets are positioned to benefit from AI infrastructure buildout, electrification trends, and changing supply chains, supported by a weaker US dollar and lower interest rates, while maintaining focus on quality investments despite geopolitical risks and trade tensions.
We remain constructive on the outlook for emerging markets, supported by a weaker US dollar, lower rates and broad capex themes such as AI, electrification and changing supply chains. Valuations remain relatively attractive, though we are mindful of an emerging AI bubble and broader risks. Our focus on quality remains key.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 29 2026 | 2025 Q4 | 000660.KS, 005930.KS, 028260.KS, 0700.HK, 267270.KS, ADIB.AD, ALDAR.AD, ASX.TW, BABA, BBNI.JK, GMEXICOB.MX, KAP.L, MULT3.SA, RIO, TLKM.JK, TSM | AI, China, Copper, emerging markets, Memory, semiconductors, technology, Trade Policy | - | AI-driven tech rally continued in Taiwan, lifting local tech stocks at the epicenter of US AI infrastructure buildout. Memory chip producers benefited from confirmed chip… |
| Oct 28 2025 | 2025 Q3 | - | Artificial Intelligence, commodities, Electrification, semiconductors, Trade | - | The fund outperformed as AI enthusiasm, trade stabilization, and strong demand for industrial metals boosted emerging markets. Chinese AI firms and semiconductor suppliers led gains,… |
| Jul 27 2025 | 2025 Q2 | - | AI Infrastructure, China Equities, Currency Trends, emerging markets, tariffs | - | - |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| Jun 30 2024 | 2024 Q2 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
CopperMarket shifted from deficit to surplus as Chinese demand stalled for first time in 25 years while supply expanded by 3 million tonnes since 2021. Exchange inventories reached 1.2 million tonnes, highest since 2003. Bearish outlook as China transitions from under-consuming to over-consuming copper. |
Base Metals China Inventories Surplus | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
Trade PolicyTrade policy dominated 2025 with surprise tariffs on Canada, Mexico and China igniting inflation fears and fracturing the post-WWII trade order. The administration threatened sweeping 125% tariffs in April, the highest U.S. tariff rates since 1935, before stepping back to bilateral deals. This policy uncertainty drove demand for tangible assets as hedges. |
Tariffs Trade War Bilateral Inflation Policy | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities | |
Trade |
||
| 2025 Q2 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value | |
Tariffs |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| 005930.KS | Selected technology-related companies held across several of our funds contributed for the quarter, particularly established franchises such as Samsung Electronics and Alphabet (Google). While the shares of both companies soared upward in price during the year, we believe they remain reasonably valued relative to their near-term growth prospects. |
| 028260.KS | Samsung C&T is the de facto holding company through which the Lee family controls the wider Samsung Group. The company's NAV is effectively comprised of two crown-jewel businesses, Samsung Electronics (39% of NAV) and Samsung Biologics (37%), plus a few smaller listed stakes and an unlisted construction and trading business. We first initiated our position in Samsung C&T in June 2025, believing that the company exhibited many of the traits that we at AVI look for: 1) a robust, listed NAV that we felt was both undervalued and set to benefit from strong earnings growth, 2) an unduly wide -57% discount, and 3) a potential catalyst to close that discount through corporate governance reform in South Korea. |
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 267270.KS | HD Hyundai Electric was up nearly 30% for the quarter, capitalizing on increased demand to expand/upgrade power infrastructure. The company will complete the construction of a new Korean power distribution equipment plant by the end of 2025. |
| ADIB.AD | In the United Arab Emirates, our holdings in Abu Dhabi Islamic Bank and Aldar Properties trailed as investors rotated out of winners into laggards. Both companies continue to report good results and remain upbeat about prospects in 2026. |
| ALDAR.AD | In the United Arab Emirates, our holdings in Abu Dhabi Islamic Bank and Aldar Properties trailed as investors rotated out of winners into laggards. Both companies continue to report good results and remain upbeat about prospects in 2026. |
| ASX.TW | ASE Technology shares rose as the company increased capacity for its advanced packaging and testing and won new orders by tapping into rising AI-driven demand. |
| BABA | our Asian investments performed strongly with Alibaba and Jardine Matheson up 63% |
| BBNI.JK | In Indonesia, easing concerns around the government and its policies saw investors return to the market, which boosted our holdings, Bank Negara Indonesia and Telkom Indonesia. |
| GMEXICOB.MX | Grupo Mexico is a holding company with mining, transportation and infrastructure operations. Primarily through its listed subsidiary Southern Copper, Grupo Mexico's mining business comprises more than 80% of earnings. With the largest reserves of any copper producer and mines well positioned on the cost curve, Grupo Mexico controls long-duration assets that are nearly impossible to replicate. Despite its high-quality characteristics, Grupo Mexico—like many holding companies—trades at a discount to the sum of its parts; Grupo Mexico's stake in publicly traded Southern Copper alone exceeds its own market cap by more than $30 billion. Bolstered by an attractive dividend, Grupo Mexico has delivered compelling, long-term total returns despite the holding-company discount. |
| TLKM.JK | Telkom was further helped by increased clarity around its efforts to refocus the business, boost profitability and return cash to shareholders. |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
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