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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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abrdn Emerging Markets Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (abrdn Emerging Markets Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

abrdn Emerging Markets Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, abrdn Emerging Markets Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+26%

YTD+89%

Positioning StanceConstructive

GeographyEmerging markets, Asia

Digest Analysis

Quick Take

"Fund underperformed on China/Taiwan stock selection despite AI-driven rally in Alibaba and Tencent. DeepSeek announcement pressured semiconductors while Trump's tariff clarity provides policy direction."

Executive Summary

The abrdn Emerging Markets Fund returned 0.26% in Q1 2025, underperforming the benchmark by 267 basis points due to negative stock selection in China and Taiwan. Despite tariff uncertainty, China delivered a strong quarter fueled by DeepSeek's AI announcement, which triggered rallies in cloud providers Alibaba and Tencent. However, concerns about reduced tech capex pressured semiconductor stocks, with Taiwanese holdings including TSMC and MediaTek detracting significantly. The fund added Chinese positions in China Merchants Bank, Li Auto, and Shenzhen Envicool Technology while selling Credicorp, Ping An Insurance, and Saudi Arabian Oil. Trump's announced 10% baseline tariffs with higher levies on China have created clarity around trade policy goals. Looking forward, the manager expects further Chinese fiscal stimulus and sees India well-positioned for a fractured global economy. Emerging market valuations remain attractive historically and versus the US, with portfolio companies delivering results that should be rewarded by markets.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

65%

CautiousHigh

Moderate (65%)

The manager demonstrates moderate to high conviction through specific position additions in China and India, clear views on regional opportunities, and confident statements about portfolio companies delivering results. However, some hedging language around market crosswinds tempers the conviction score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about emerging markets, noting attractive valuations and structural opportunities, but acknowledges significant headwinds from tariffs and AI-driven volatility. The outlook is moderately positive but tempered by uncertainty.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The fund made selective additions in China and India while trimming some positions, indicating a measured approach. The positioning reflects cautious optimism rather than aggressive risk-taking, with selective deployment rather than broad-based increases.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

The fund made selective additions of four new holdings while selling four positions, indicating modest net deployment activity. The activity suggests measured capital deployment rather than aggressive scaling or significant de-risking.

Forward Guidance

35%

CautiousExpansionary

Cautious (35%)

The manager expresses confidence in holdings and their ability to navigate crosswinds, expects Chinese fiscal stimulus, and sees India as well-positioned. The forward guidance is constructive with specific positive catalysts identified.

Language Signal

20%

BearishBullish

Bearish (20%)

Language includes positive terms like 'attractive valuations', 'confident in holdings', and 'structural opportunities', balanced against risk discussions around tariffs and market volatility. Net language signal is mildly positive.

Perceived Risk

60%

Low RiskElevated

Moderate Risk (60%)

The manager acknowledges multiple risk factors including tariff uncertainty, AI-driven volatility, potential tech capex reduction, and broader economic uncertainty. Risk discussion is prominent throughout the commentary, indicating moderate to high perceived risk.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The manager identifies selective opportunities across China, India, and UAE, noting attractive emerging market valuations historically and versus the US. Opportunity set appears selective but meaningful across multiple regions and sectors.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

References to structural drivers in India, long-term growth targets in China, and focus on companies delivering results suggest a medium to long-term investment horizon. The approach appears patient rather than catalyst-dependent.