10 Best Emerging Markets Stocks to Buy According to Hedge Funds

5. Nu Holdings Ltd. (NYSE:NU)

Number of Hedge Fund Holders: 79

​​Nu Holdings Ltd. (NYSE:NU) is a leading digital banking platform in Latin America. Headquartered in São Paulo, Brazil, NU offers a range of financial services, including credit cards, digital accounts, personal loans, life insurance, and investment products, primarily through its mobile app. The company serves over 114 million customers across Brazil, Mexico, and Colombia, focusing on providing accessible and user-friendly financial solutions. With its operations concentrated in these Latin American countries, NU provides significant exposure to emerging markets.

Nu Holdings Ltd. (NYSE:NU) delivered standout results in 2024, with revenue increasing 58% YoY to $11.5 billion, driven by a 23% rise in average revenue per active customer, which reached $10.7. The company saw substantial customer growth, ending the year with 114 million users – an addition of 20.4 million new customers. Active customer growth held strong at 22% YoY. Profitability also improved, with net income nearly doubling to close to $2 billion, translating to an annualized return on equity of 28%. Operational efficiency reached new highs, with the efficiency ratio falling to 29.9%, placing Nu among the most efficient financial services companies globally.

Nu Holdings Ltd. (NYSE:NU) also experienced significant expansion in its core financial operations. Deposits increased by 55% to $28.9 billion, and the interest-earning portfolio grew 75% on a foreign exchange-neutral basis, hitting $11.2 billion. In Mexico, the company surpassed 10 million customers and saw deposits surge by 438% to $4.5 billion. Secured lending also gained traction, growing 615% YoY to reach $1.4 billion, now accounting for 23% of NU’s total lending portfolio. Credit quality remained strong, with performance exceeding industry benchmarks across all risk tiers. Additionally, the company expanded its presence among high-income clients, with the Ultravioleta segment growing 132% compared to the previous year. NU’s exceptional growth story and the still long runway for expansion in Latin America make it one of the best emerging markets stocks to invest in.