- Out of the 196 emerging market funds analysed, 33 consistently outperformed their peers, earning a top 4 or 5-star rating.
- 63% of the 196 funds analysed were rated as poor performers, with 68 receiving a 1-star rating and 56 a 2-star rating based on their 1, 3, 5, and 10 year performance.
- The Jupiter India Select fund has been the top performing fund in the IA India/Indian Subcontinent sector, consistently ranking number 1 with returns well above sector averages across multiple timeframes.
- The Templeton Emerging Markets Smaller Companies Fund delivered the highest returns in its sector over 10 years.
Emerging market funds play a vital role in diversifying portfolios, particularly for investors with a higher risk tolerance. While these funds have historically shown greater volatility, they can deliver substantial long-term returns when carefully selected.
In this article, we highlight 10 top-performing emerging market funds that have consistently outperformed their peers over the past 1, 3, 5, and 10 years.
To provide a broader perspective, we've also compiled an in-depth report analysing 196 emerging market funds. This comprehensive overview examines performance metrics, sector rankings, and ratings, equipping investors with crucial insights for making well-informed investment decisions.
Emerging Markets Fund Performance Summary
The emerging markets investment landscape offers a rich tapestry of opportunities for investors seeking exposure to rapidly developing economies. Our comprehensive analysis encompassed 196 funds spanning three key sectors: the IA Global Emerging Market Sector, the IA India/Indian Subcontinent Sector, and the IA Latin America Sector.
Among the 196 Emerging Markets funds evaluated, 33 (15.8%) achieved top-tier ratings of 4 or 5 stars. These top performing funds have demonstrated consistent strength and reliability outperforming the majority of their sector peers over the various time frames. 41 funds received a moderate 3 star rating, indicating steady performance with returns similar to the sector average.
More than half (63.3%) of these funds struggled to consistently outperform their peers. Specifically, 68 funds received a 1-star rating, and 56 earned a 2-star rating, indicating poor performance over 1, 3, 5, and 10 years.
This performance distribution underscores the importance of careful fund selection, particularly with emerging market funds which are often highly volatile.
For an in-depth analysis of all 196 emerging market funds across 3 sectors, including detailed performance data, sector rankings, and ratings over 1, 3, 5, and 10 years, download the full PDF analysis.
How Yodelar Rates Fund Performance
Emerging Market Investment Sectors Defined
For this report, we analysed 196 emerging market funds across 3 different sectors, each sector with differing criteria of emerging market funds.
IA Global Emerging Market Sector
The Investment Association's (IA) Global Emerging Markets sector comprises funds that invest at least 80% of their assets in equities from countries classified as emerging markets, according to benchmarks like the FTSE or MSCI Emerging Markets indices. These funds aim to capitalise on the growth potential of developing economies, although they may also include a limited allocation (up to 20%) to frontier markets, which are less financially mature markets such as Vietnam.
The sector excludes funds focused solely on frontier markets or specific regions within emerging markets, categorising them instead as Specialist funds. Additionally, companies primarily based in emerging markets but listed on developed market exchanges are considered non-core and may only be included within the 20% allocation.
IA India/Indian Subcontinent Sector
The Investment Association's (IA) India/Indian Subcontinent sector includes funds that primarily invest in equities of companies based in India and the surrounding region, such as Pakistan, Sri Lanka, and Bangladesh. These funds focus on capturing the economic growth and investment opportunities within this geographically and economically significant area. To qualify for this sector, funds must allocate at least 80% of their assets to the Indian subcontinent, offering investors exposure to the region's dynamic and rapidly evolving markets. The sector provides a targeted investment strategy, focusing on the potential of these emerging economies.
IA Latin America Sector
The Investment Association's (IA) Latin America sector consists of funds that predominantly invest in equities of companies based in Latin American countries, such as Brazil, Mexico, Chile, and Argentina. These funds are designed to tap into the growth potential and investment opportunities within the region, which is characterised by its diverse economies, rich natural resources, and growing consumer markets. To be classified in this sector, funds must invest at least 80% of their assets in Latin American equities, offering investors exposure to both the opportunities and risks associated with this dynamic and often volatile region.
For a comprehensive analysis of all 196 best Emerging Markets funds including detailed performance data, sector rankings, and ratings over 1, 3, 5 & 10 years, download the full PDF analysis.
Download The Complete Best Emerging Market Funds Report
10 Top Performing Emerging Market Funds
The table below lists 10 of the best performing Emerging Market funds over the past 1, 3, 5 & 10 years.
Each of these funds have an impressive history of top performance relative to their sector peers over both the short and long term with each consistently ranking among the top performing funds in their sectors.
1. Jupiter India Select
Launched in 2008, the Jupiter India Select Fund manages £671.67 million in assets. Its primary objective is long-term capital growth by investing mainly in Indian equities, with selective investments in neighbouring countries including Pakistan, Bangladesh, Sri Lanka, Bhutan, Nepal, and the Maldives.
The fund has consistently ranked among the top performers within the IA India/Indian Subcontinent sector. Over the past year, it delivered a return of 52.96%, placing it 1st out of 25 funds in the sector. Its 3-year and 5-year returns of 94.54% and 134.37%, respectively, have significantly outperformed the sector averages of 50.45% and 91.19%.
The fund’s success is driven by its focused investment strategy, maintaining a concentrated portfolio of stocks with strong growth potential. By targeting key sectors such as technology, financial services, and consumer goods, which are central to India’s economic development, the fund has achieved notable returns. This strategic positioning makes it a strong candidate for investors seeking exposure to India's growing market.
2. Jupiter India Fund
The Jupiter India Fund is a top performer within the IA India/Indian Subcontinent sector, managing £1.97 billion in assets. Its objective is to achieve long-term capital growth by outperforming the MSCI India Index over a minimum of five years. The fund primarily invests at least 70% of its assets in Indian companies, with the flexibility to allocate up to 30% in global assets, including companies outside India, open-ended funds, and cash. It also has the option to invest in businesses in Pakistan, Sri Lanka, and Bangladesh, or those significantly connected to India.
The fund's performance has been impressive, consistently ranking in the top 25% of its sector. Over the past 1, 3, 5, and 10 years, it has delivered returns of 52.69%, 90.61%, 127.91%, and 267.19%, respectively, far exceeding the sector averages of 31.94%, 50.45%, 91.19%, and 236.81%.
Managed by Avinash Vazirani, an experienced specialist in Indian equities, the fund focuses on companies with strong growth potential and effective management. Its success is attributed to a strategic mix of sector diversification and a balanced investment in large-cap and mid-cap stocks, which provides resilience in volatile markets. This disciplined approach has helped the fund consistently capitalise on growth opportunities in India and the surrounding region.
3. Invesco India Equity Fund
The Invesco India Equity Fund has consistently delivered strong returns, outperforming the sector average across various time periods. Over the past year, the fund achieved a return of 39.68%, surpassing the sector average of 31.94%. Its three-year performance is similarly impressive, with a return of 66.64%, placing it among the top 50% of its sector. Long-term results are equally solid, with five-year and ten-year returns of 97.76% and 276.12%, both exceeding the sector averages of 91.19% and 236.81%.
The fund’s primary goal is long-term capital growth by investing mainly in equities and similar instruments of Indian companies. While not strictly tied to the MSCI India 10/40 Index (Net Total Return), many of its holdings are aligned with this benchmark. The fund currently manages approximately £749.39 million in assets.
Invesco India Equity’s investment strategy is based on thorough fundamental analysis, focusing on companies positioned to benefit from India's structural growth drivers, such as financial sector transformation, rising consumer demand, and the expansion of manufacturing. Its active management approach, combined with the strategic use of derivatives, has allowed the fund to effectively manage risk while taking advantage of market opportunities, contributing to its consistent success.
4. FSSA Indian Subcontinent All-Cap B Acc Fund
Launched in 2018, the FSSA Indian Subcontinent All-Cap B Acc GBP fund manages £39.64 million in assets. Its objective is to achieve capital growth over the medium to long term (at least three years) by investing at least 70% of its assets in companies based in, or deriving a significant portion of their revenue from, India, Pakistan, Sri Lanka, and Bangladesh. This includes companies listed on global exchanges that provide meaningful exposure to these regions.
The fund adopts an all-cap strategy, investing across businesses of various market sizes, which offers a wide range of growth opportunities. It also has the flexibility to allocate up to 10% of its assets to other funds, further enhancing diversification.
The fund’s focus on high-quality companies with sustainable growth potential has delivered strong results. Over the past year, it achieved a return of 36.61%, and over three years, it has grown by 61.21%. Its five-year performance stands out, with growth of 95.75%, consistently placing it among the top performers in its sector.
The fund’s success is supported by a well-diversified portfolio spanning key sectors such as consumer goods, financial services, and technology. Notable holdings include HDFC Bank, Tata Consultancy Services, and ICICI Bank. Through strategic stock selection, the fund has effectively navigated market fluctuations, establishing itself as a strong contender for investors seeking exposure to the Indian subcontinent's growth potential.
5. SPDR MSCI Emerging Markets Small Cap UCITS ETF
With £319.40 million in assets under management, the SPDR MSCI Emerging Markets Small Cap UCITS ETF USD consistently ranks among the top-performing funds in the IA Global Emerging Markets sector. The fund aims to replicate the performance of the MSCI Emerging Markets Small Cap Index, which tracks small-cap companies across various sectors in emerging markets.
The fund has delivered impressive returns, significantly outperforming sector averages over different time periods. Over the past three years, it achieved a growth of 15.33%, well above the sector average of -5.19%. Its five-year return of 51.79% places it 1st out of 130 funds in the sector. Over the past 10 years, it returned 109.12%, exceeding the sector average of 67.63%.
These results reflect the fund’s success in capturing the growth potential of small-cap stocks in emerging markets, which tend to be more agile and capable of higher returns compared to larger companies.
As both the largest and cheapest option for tracking the MSCI Emerging Markets Small Cap Index, the fund employs a passive investment strategy, using a sampling technique to closely follow the index's performance while keeping costs low. This makes it a cost-effective and efficient choice for investors seeking exposure to the dynamic small-cap segment in emerging markets.
6. Invesco Global Emerging Markets Fund
The Invesco Global Emerging Markets Fund (UK) Z Acc is a £547.76 million fund targeting long-term capital growth over a minimum five-year horizon. Its primary strategy involves allocating at least 80% of assets to equity or equity-related securities of companies either based in or significantly engaged with emerging markets globally. The fund may also employ derivatives for risk management, cost reduction, and additional capital or income generation.
The fund has consistently outperformed the IA Global Emerging Markets sector across all measured time frames. Over one year, it achieved a return of 8.73% compared to the sector average of 6.07%. The three-year performance shows a 9.33% return against the sector's -5.19%. Over five years, the fund delivered a 38.28% return, significantly outpacing the sector average of 11.53%. The ten-year performance is particularly impressive, with a 115.19% return compared to the sector's 67.73%.
The fund prioritises companies exhibiting strong financial health and growth potential. This approach has been instrumental in driving the fund's performance.
The fund maintains a geographically diverse portfolio with a significant focus on Asian markets, including China, Taiwan, South Korea, and India. These regions, characterised by rapid economic growth, contribute substantially to the fund's holdings. Key investments include industry leaders such as Taiwan Semiconductor Manufacturing Co. Ltd., Samsung Electronics, and Tencent Holdings.
7. Artemis SmartGARP Global Emerging Markets Equity Fund
Launched on 8 April 2015, the Artemis SmartGARP Global Emerging Markets Equity Fund manages £924.23 million in assets. Its primary objective is to achieve capital growth over a five-year period by investing 80% to 100% of its assets in company shares within emerging markets. The fund also has the flexibility to allocate up to 20% of its assets to bonds, cash, near-cash instruments, and other investment vehicles such as collective investment schemes and money market instruments.
The fund has delivered strong performance over the past 1, 3, and 5 years, returning 16.87%, 21.49%, and 34.96%, respectively. These returns significantly outperform the sector averages of 6.07%, -5.19%, and 11.53%, placing the fund among the top performers in its sector.
A key driver of the fund's success is its use of the proprietary SmartGARP investment process. This data-driven approach identifies undervalued companies with strong growth potential by analysing financial metrics such as valuation and earnings momentum. The fund's focus on these indicators, combined with its ability to adapt to changing market conditions, has enabled it to maintain a balanced and resilient portfolio.
Additionally, the fund’s strategic allocation to high-growth sectors, including financial services, consumer cyclicals, and technology, has contributed significantly to its strong performance, making it a compelling option for investors seeking exposure to emerging markets.
8. Templeton Emerging Markets Smaller Companies Fund
The Templeton Emerging Markets Smaller Companies Fund is designed to deliver medium- to long-term capital growth primarily by investing in smaller companies, typically with market capitalisations around $2 billion, that are based in or closely linked to emerging markets.
The fund has demonstrated consistently strong performance, outperforming sector averages across various time frames. Over the past 1, 3, and 5 years, it delivered growth of 12.57%, 11.01%, and 32.17%, respectively. Its 10-year performance is particularly noteworthy, achieving a return of 120.82%, ranking 1st out of 92 funds in its sector. This track record underscores the fund's ability to effectively identify and capitalise on opportunities in emerging markets.
The fund’s success stems from its strategic focus on smaller companies in emerging markets, often overlooked by other investors. By targeting regions such as Asia, Latin America, and Eastern Europe, the fund not only diversifies its portfolio but also enhances its capacity to capture high-growth opportunities.
Supported by Franklin Templeton’s extensive global research capabilities, the fund is well-positioned to identify companies with significant growth potential while managing risk effectively, making it a compelling option for investors seeking exposure to emerging markets.
9. Allianz Emerging Markets Equity Fund
Established in 2006, the Allianz Emerging Markets Equity Fund manages £128.19 million in assets. Its primary objective is to outperform the MSCI Emerging Markets Total Return Net (in GBP) over a rolling five-year period.
The fund aims for long-term capital growth by investing predominantly in the equity markets of countries within the MSCI Emerging Markets Index. To enhance diversification and manage risk, up to 20% of the fund’s assets may be invested outside of emerging markets, including developed economies and other emerging market regions.
The fund managers employ a balanced approach, focusing on a mix of large-cap and mid-cap stocks to capture growth potential while maintaining stability. This strategy has delivered strong results, with returns of 16.26%, 2.26%, and 28.51% over the past 1, 3, and 5 years, respectively, significantly outperforming sector averages.
Most notably, over the past 10 years, the fund has achieved a growth of 98.75%, far exceeding the sector average of 67.73%. This substantial outperformance demonstrates the fund's strong ability to generate superior returns in emerging markets over the long term, making it a compelling option for investors seeking exposure to these dynamic economies.
10. JPM Emerging Markets Income Fund
The JPM Emerging Markets Income Fund has demonstrated robust performance across various time horizons, consistently outpacing its peers in the IA Global Emerging Markets sector. The fund's recent performance is particularly noteworthy, with impressive short-term gains that underscore its resilience and strategic acumen in navigating volatile market conditions.
Over the past year, the fund achieved a commendable growth of 9.70%, significantly outperforming the sector average. This strong showing extends to its three-year performance, where the fund posted a remarkable 10.99% return. These figures are especially significant given the challenging global economic landscape and the inherent volatility of emerging markets.
The fund's ability to generate superior returns is not limited to short-term horizons. Its long-term track record further cements its position as a top performer in its category. Over a five-year period, the JPM Emerging Markets Income Fund delivered a robust return of 27.01%, more than doubling the sector average of 11.53%. This outperformance becomes even more pronounced when examining the fund's decade-long performance. With a ten-year return of 91.52%, the fund has significantly outpaced the sector average of 67.73%, showcasing its ability to generate substantial value for investors over extended periods.
These consistent above-average returns across multiple time frames suggest that the fund's management team has successfully implemented a strategy that adapts to changing market conditions while maintaining a focus on long-term growth. The fund's ability to outperform in both recent years and over longer horizons indicates a balanced approach that combines tactical agility with strategic foresight.
Benefits of Investing in Emerging Markets
Investing in emerging markets offers distinct advantages for portfolio diversification and potential returns. These rapidly growing economies, with expanding industrial bases and middle classes, present opportunities not found in mature markets.
Key benefits include diversification, which helps spread risk across different economic cycles, political systems, and currencies, mitigating the impact of localised downturns.
Emerging markets also offer significant growth potential, often outpacing developed economies, leading to higher corporate earnings and stock market performance as industries expand and new market leaders emerge.
Favourable demographic trends, especially in regions like India and Southeast Asia, further boost growth potential through increased consumer spending. Additionally, emerging market assets are often attractively valued compared to developed markets, offering potential for price appreciation as these economies mature.
Technological leapfrogging is another advantage, with many emerging markets adopting advanced technologies more rapidly than developed nations, fostering innovation in sectors like fintech, e-commerce, and renewable energy.
Risks of Investing in Emerging Markets
While emerging markets present growth opportunities, they come with significant risks. The path to becoming a developed economy can be unpredictable, requiring low debt, a strong labour market, and stable governance to ensure progress.
Political instability, currency fluctuations, and infrastructure issues frequently disrupt business operations and impact returns. Regulatory uncertainty, including inconsistent enforcement and lack of transparency, can deter investors. Liquidity challenges can also make it difficult to trade assets quickly, increasing volatility.
Many emerging markets rely heavily on commodities like oil, gas, and minerals, making them vulnerable to global price fluctuations. Additionally, economic mismanagement or events like natural disasters, as seen with Russia's ongoing struggles, can further destabilise growth. Timing is another risk—investing too late in rapidly growing economies, like China, can result in higher costs as these markets mature.
Strategic and Diversified Investing for Long-Term Success
Like many things in life, investing can be challenging. But those who adhere to a defined, long-term strategy and have a disciplined, realistic attitude to investing are usually the ones that accomplish their goals efficiently. When this is followed, better results can be obtained.
Investors can strengthen their investments and achieve better results by being aware of the costly mistakes described in this article and taking appropriate steps to avoid them.
Having a strategic investment approach and maintaining a diversified portfolio are key aspects of managing risk and achieving success, in long-term investments.
Remember, no single sector consistently leads in performance, so diversifying across various asset classes and regions can help stabilise and grow your investments over time.
Identifying the best performing funds within each asset class will also contribute to achieving optimal returns and safeguarding your financial future.
Download our full analysis to explore the complete performance data, sector rankings, and ratings of all 196 emerging market funds to determine which funds are most likely to provide strong returns in the future.
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