Emerging markets have returned to relevance after years in the doldrums as a weakening dollar, a rotation away from expensive US equities and strong performance across Asian markets have combined to give the asset class renewed momentum in 2026.
For investors looking to gain exposure, the choice of structure matters as much as the choice of manager. The three largest active funds in the IA Global Emerging Markets sector – Robeco Emerging Stars Equities (€4.4bn), Polar Emerging Market Stars ($4.4bn) and Royal London Emerging Markets Equity Tilt (£7.1bn) – span a wide range of approaches and costs, from Robeco's high-conviction, high-fee active strategy to Royal London's near-passive tilt fund.
On the trust side, the three largest vehicles are Templeton Emerging Markets Investment Trust (£2.7bn), JPMorgan Emerging Markets Growth & Income (£1.5bn) and Fidelity Emerging Markets (£549m).
Below, we asked fund pickers which they prefer and why.
The fund picks
Among the three, Robeco Emerging Stars Equities – a Luxemburg-based fund managed by Jaap Van Der Hart and Karnail Sangha – has been the standout performer over most time periods: up 67.5% over one year, 86.3% over three years and 66.8% over five years, which comfortably exceed the Polar Capital fund's equivalent returns of 42.5%, 55.6% and 20.4%.
Its alpha of 13.28 and Sharpe ratio of 2.88 over the past year suggest its active risk has been rewarded, although investors do have to pay more for this as the fund has an ongoing charges figure (OCF) of 1.24%.
Sheridan Admans, chief investment strategist at Infundly, chose it for its concentrated 35-to-50 stock approach, combining top-down country allocation with bottom-up stock selection.
"It is genuinely active and comfortable taking big bets on companies it believes have healthy, solid business models and attractive growth prospects at reasonable valuations," he said.
Darius McDermott, managing director at FundCalibre, also went for the Robeco fund, highlighting its ability to access opportunities through discounted holding companies.
"By investing in names such as SK Square instead of SK Hynix, or Naspers rather than Tencent, the managers gain exposure to high-quality growth assets at a meaningful discount," he said. "As these discounts narrow over time, this can provide an additional source of returns beyond underlying earnings growth."
Royal London Emerging Markets Equity Tilt is a different kind of product: a near-passive vehicle charging 0.10% which works by adding active tilts to a benchmark allocation.
The trust picks
On the trust side, opinion was more divided. Admans chose the Templeton Emerging Markets trust, citing its scale, experienced team and the potential return from discount narrowing.
At roughly 8%, the discount offers a second performance lever for investors who are patient enough to wait for sentiment to improve. It is managed by Chetan Sehgal and Andrew Ness and has achieved a maximum FE fundinfo Crown rating of five.
"Investors are paying for the managers to take views on where the structural winners in emerging markets are likely to be," Admans said.
On the other hand, McDermott went for JPMorgan Emerging Markets Growth & Income, as it "leans more clearly into the structural growth story underpinning emerging markets, with greater exposure to areas such as India and domestically driven economies", while also offering an income component, which he saw as a growing source of return in the asset class.
Templeton's more valuation-aware approach "has delivered strong long-term results, but can lag when growth-led markets are in favour", he said.
Finally, Fairview Investing director Ben Yearsley liked Fidelity Emerging Markets for its 130/30 long-short structure.
"[Managers] Nick Price and Chris Tennant have shown they are adept at both finding good companies and poor companies," he said.
Its one-year return of 96.4% is the highest of any vehicle in this comparison by a wide margin.
Funds or trusts?
As investment trusts do not face redemption pressure, managers can hold illiquid positions, use gearing and take a long-term view without being forced to sell at the wrong point in the cycle.
However, they are priced just like shares and can trade below the value of their underlying assets, which can amplify losses when sentiment turns.
McDermott said that "in emerging markets, where volatility and liquidity constraints are part of the opportunity set, the closed-ended structure comes into its own".
Yearsley broadly agreed but noted the advantages aren’t as strong as in other asset classes.
"I'm not in the camp of unit trust over investment trust or vice versa," he said. "Emerging-market equity is one of those where I slightly favour trust over fund, although it's not as clear-cut as say frontier equities, where you're definitely better off in a trust."