Portfolio Manager Insights

Making cents of emerging-markets banks

Fidelity’s Sam Polyak thinks that several well-managed, attractively valued lending institutions in emerging markets deserve a closer look amid evolving macroeconomic conditions.

By: Sam Polyak
Updated: 6/1/2026
  • A weaker U.S. dollar and rising interest rates – driven by inflation and fiscal concerns – have boosted the appeal of emerging-markets banks, according to Fidelity Portfolio Manager Sam Polyak, helping the category overcome past headwinds from currency volatility and low interest rates.
  • “For years, these lending institutions – operating in dynamic economies where growth potential is high, but challenges are equally pronounced – struggled to maintain profitability,” explains Polyak, who manages Fidelity Advisor® Focused Emerging Markets Fund. “This constantly evolving landscape makes it all the more important to emphasize well-managed, fundamentally strong firms in underappreciated regions of the world.”
  • In helming the emerging-markets equity strategy since 2019, Polyak employs a growth-at-a-reasonable-price approach to target businesses benefiting from long-term secular drivers.
  • Against a generally more favorable backdrop for emerging-markets banks, I’ve been able to purchase several of these stocks that I’ve had my eye on for some time but had previously avoided due to valuation reasons,” says Polyak. 
  • As an example, he cites Bank Central Asia, Indonesia’s largest private lender. Renowned for its operational excellence, Polyak believes it is one of the best-run financial institutions in emerging markets. As of April 30, 2026, the fund held shares of the company despite sluggish economic growth – both domestically and abroad – weighing on loan growth and dampening investor sentiment toward bank stocks overall.
  • Recent political developments in Indonesia have added further complexity, he says, noting that in September President and former general Prabowo Subianto reshuffled key economic and security ministers amid public unrest over rising living costs and lawmakers’ perks.
  • “While some market participants understandably feared a return to a late-20th-century military dictatorship, I considered these concerns overstated and took the opportunity to build exposure to the stock,” Polyak explains. 
  • Elsewhere, Al Rajhi Bank – one of Saudi Arabia’s largest lenders – also reflects the potential within emerging-market banking, says Polyak. Headquartered in Riyadh, the firm has more than 500 branches across Saudi Arabia, Kuwait, Jordan and Malaysia.
  • Here, Polyak established a position after the shares had underperformed, primarily due to softness in crude-oil prices.
  • “As I see it, both Al Rajhi Bank and Bank Central Asia have strong underlying deposit bases and solid franchises,” he concludes. “My hope is that over time, these fund holdings will demonstrate the merits of patience – allowing valuations to settle to more reasonable levels rather than chasing them.”
 
Explore more on:
Emerging Markets Equity Financials Industry Interest rates International Sectors
FEATURED FUND

Fidelity Advisor Focused Emerging Markets Fund (FIMKX)

Seeks capital appreciation.

View fund

Related insights

View all
Portfolio Manager Insights
Investing in companies harnessing AI to transform their business
Fidelity’s Kyle Weaver favors companies that have already begun to successfully adopt the technology to help boost their growth prospects.
Portfolio Manager Insights
In seeking AI ‘winners,’ I’m staying flexible
An adaptable investment approach and valuation discipline are key to capturing opportunities in artificial intelligence, according to Fidelity’s Matt Fruhan.
Portfolio Manager Insights
Bioprocessing stocks set for a rebound?
Demand for bioprocessing equipment is on the rise as biotechnology companies tighten their focus on complex drugs and cell and gene therapies, says Fidelity’s Eddie Yoon.

For specific fund information such as standard performance and holdings, please go to the "Funds Managed" link on this page.

Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice, and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision. These materials are provided for informational purposes only and should not be used or construed as a recommendation of any security, sector, or investment strategy.

Fidelity does not provide legal or tax advice and the information provided herein is general in nature and should not be considered legal or tax advice. Consult with an attorney or a tax professional regarding your specific legal or tax situation.

Past performance and dividend rates are historical and do not guarantee future results.

Investing involves risk, including risk of loss.

Diversification does not ensure a profit or guarantee against loss.

Sector funds can be more volatile because of their narrow concentration in a specific industry. Growth stocks can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. • Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. • Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. • In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit, and default risks for both issuers and counterparties. • Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. • Floating-rate loans may not be fully collateralized and therefore may decline significantly in value. • The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes, and the financial condition of the issuers of municipal securities. • The securities of smaller, less well-known companies can be more volatile than those of larger companies. • The funds can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. • Leverage can magnify the impact of adverse issuer, political, regulatory, market, or economic developments on a company. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Although the companies that the fund invests in may be highly leveraged, the fund itself does not use leverage as an investment strategy. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Third-party marks are the property of their respective owners; all other marks are the property of FMR LLC.

935099.100
4110A62FEC344C359019F00422371A82